Hyderabad: Compared to other developing countries, the difficulties faced by the Indian agriculture sector are very high. Not only natural disasters evaporate their hopes, the country's economy also plays a significant role. A National Sample Survey study shows that more than 50 percent of the country's farmers are in debt. The Cess study had earlier stated that it was 93 per cent in Andhra Pradesh. The central government's goal of doubling the income of the farmers in the next five years seems utopian.
Those who fall into the debt trap due to crop losses will eventually resort to suicide. During 1995-2015, 3.10 lakh farmers committed suicide. The agrarian crisis has forced farmers in many states to penury. Though the rulers boast of various measures to solve the farmer's problem, there is no improvement in their lives. Prime Minister Modi brought in a new ‘Pradhan Mantri Fasal Bima Yojana' scheme four years ago in January 2016, replacing the then existing crop insurance schemes. Since the insurance schemes of the past governments failed in helping the farmers, the introduction of this Yojana was felt necessary. Previous crop insurance schemes charged high premium from the farmer with limited compensation and the Government's share of the premium was also low. But the new scheme is completely different and novel. In order to assess the loss and to ensure quick compensation to the farmers, Remote Sensing Smart Phone and apparatus like drones will be used. The scheme helps to prevent fluctuations in the income of the farmers and the necessity of leaving the farm for other employment opportunities.
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Scheme beneficial for insurance companies?
Under this scheme, by 2019 Kharif, the number of applications from farmers has increased tremendously. About 5.80 crore in 2016-17, 5.25 crore in 2017-18 and 5.64 crore farmers in 2018-19 have joined the scheme. Collection of the gross premium for the three years was Rs 22,008 crores, Rs 25,481 crores and Rs 29,035 crores respectively. It is evident that though the number of farmers decreased but the premium has increased. The farmer's share was Rs 4,227 crores, Rs 4,431 crores and Rs 4,889 crores for three years respectively. It is estimated that around 3.70 crore people have enrolled in the scheme during the Kharif of 2019-20 and most of them are not bank borrowers. The amount of compensation paid by insurance companies to farmers is very different compared to the premium they charge.The difference was attributed to the profit of the insurance companies, which stood at Rs 5,391 crore in the first year and Rs 3,776 crore and Rs 14,789 crore for the next two years respectively. It seems that the insurance companies have benefited greatly from this scheme. As a result, the farmers associations are accusing that the scheme is introduced only to benefit the insurance companies.
This scheme has become a management flaw. As the Ministry of Agriculture failed to bestow full attention, the insurance companies neglected insurance payments of billions of rupees annually. The inefficient implementation of the scheme is evident by the fact that during the Kharif season ending in December 2018, the insurance companies were due five thousand crore rupees compensation to the farmers. During the Kharif season that year, while farmers were due compensation of Rs 14,813 crores under the scheme, only Rs 9,799 crores was paid as of July 2019. It is noteworthy that farmers in 45 districts are still to be paid 50% of their insurance money. Under the scheme, farmer's dues must be paid within two months of the end of the Kharif or Rabi season.
The 2018 Kharif season ended with December. But even by the end of next year, payments to farmers were not made due to lack of coordination between insurance companies. On the other hand, farmers are complaining that the insurance premium of some crops is high. With this, the central government has decided to remove those crops by the end of 2020 Kharif season and is in consultation with the state governments. Insurance companies, on the other hand, seem to have difficulties with short-term decisions. At a time when farmers from Marathwada region committed suicide during 2018-19, the Co-operative Act clarifies that the insurance companies have made a profit of Rs. 1,237 crore from this scheme. This means that the insurance companies have benefited at an average of Rs 1 crore per suicide. Lack of adequate expertise in insurance companies in the calculation of compensation is very upsetting.
The Center says there are many difficulties in assessing crop loss under this scheme. As a result, timely payment of compensation has become difficult. Under this scheme, crop yields are estimated by 'crop cutting' experiments. It is very difficult to conduct millions of experiments in the country in a short time. According to officials, the software app used for this purpose is not working even at 15 percent efficiency. The Center blames the negligence of the state governments for the delay in payment of compensation. On the other hand, farmers are angry that the insurance premium is being deducted by banks even while disbursing the loan. This problem is predominant in Maharashtra, Andhra Pradesh, Rajasthan, Madhya Pradesh, and other 10 states.
