Getting crop insurance on target By A Amarender Reddy
TelanganaToday: 23rd Jan 2018
https://telanganatoday.com/getting-crop-insurance-on-target
The Government of India started the Pradhan Mantri Fasal Bima Yojana (PMFBY) since 2016-17 with uniform premium rates for farmers with 1.5%, 2% and 5% of the sum insured for kharif, rabi and annual crops respectively
But the insurance companies charge actuarial rates. The gap between farmers’ premium rates and actuarial rates are subsidised by Central and State governments. The PMFBY target is to provide crop insurance to 30%, 40% and 50% of the total cropped area in the country during 2016-17, 2017-18 and 2018-19 respectively. As per Budget 2017-18, PMFBY has to cover 40% of the gross cropped area and reduce risk by 60% for about 60 million farmer households.
In its first year (2016-17), the PMFBY reached its targets in terms of farmers and area coverage, but field observations show that there are implementation bottlenecks to maximise benefits for farmers
Uniform cut-off dates across India for premium payments are not ideal for diverse agro-climatic conditions across States
The geographical distribution of PMFBY was highly skewed with only five States — Maharashtra, Rajasthan, Madhya Pradesh, West Bengal and Uttar Pradesh — together accounting for about 70% of the insured farmers, although these States account for only 43% of the country’s total farmers. Crop insurance also needs to be promoted in rainfed districts to cover risk. Priority must be accorded to strengthening State Level Coordination Committee on Crop Insurance and District Level Monitoring Committee to coordinate State-level plans and to suggest timely adjustments in implementation schedule in collaboration with financial institutions and insurance companies for maximum coverage.
There is also need to increase the efficiency of the whole set of operations starting from the functioning of weather stations, crop-cutting experiments, use of drones and satellite images and GIS-based mobile phones to estimate yield losses, provide seamless connectivity and transfer of information among farmers, agriculture department, banks and insurance companies. Most of the farmers are not aware of crop insurance portal and most of the times, online registration is non-functional.
Uniform cut-off dates across India for premium payments are not ideal for diverse agro-climatic conditions across States. States should have flexibility in deciding cut-off dates for premium payments as well as release of claims in time before the sowing of next season so that farmers use the claims money to purchase seeds and other inputs for next season without depending on moneylenders.
Timely release of advances (up to 25% of the claims) in case of adverse events such as inability to sow owing to inclement weather and mid-season adversity like floods is important to increase belief in the system. For this, there should be sufficient staff and resources for quick field survey and prompt notification by State governments. Cut-off dates should be widely publicised.
The success of PMFBY depends on the how well crores of small farmers can adopt it to reduce their crop risk.
(The author is Director – Monitoring and Evaluation, National Institute of Agricultural Extension Management (Manage), Hyderabad; amarender.anugu@manage.gov.in)