Like Bihar, state mulls its own crop insurance scheme

  • 20/11/2018

Like Bihar, state mulls its own crop insurance scheme

Karnataka is planning to dump the Pradhan Mantri Fasal Bima Yojana (PMFBY) and come out with its own crop insurance scheme on the lines of Bihar.

Launched in 2016 by Prime Minister Narendra Modi, the flagship scheme has met with criticism for tardy implementation and that it was favouring insurance firms than farmers.

“The government is considering bringing in our own crop insurance scheme as the PMFBY is rigid in terms of parametres for farmers to receive insurance and there are delays in settlement of claims,” Agriculture Minister N H Shivashankar Reddy told reporters. Apparently, claims dating back to 2016-17 are still pending in the state. “We’re apprehensive that the current regime is not farmer-friendly.”

Earlier this year, Bihar launched the Bihar Rajya Fasal Sahayata Yojana making it the first state to discard the Centre’s crop insurance scheme and adopt its own.

Whether or not Karnataka will roll out its own crop insurance scheme depends on the financial implications involved, Reddy said. Under the PMFBY, farmers pay between 1.5-2% of the insurance premium with the rest shared equally by the Centre and states. “Currently, Karnataka spends about Rs 1,200 crore toward premium.”

The Congress has been hammering at the Centre over shortcomings in the PMFBY. Recently, the Centre revamped the scheme to impose a 12% penalty on insurers for delays in claim settlement. Also, the scheme now covers a wider variety of risks and gives more time for farmers to report their losses.

According to Agriculture Secretary M Maheshwar Rao, enrollment for PMFBY insurance in the Kharif season decreased this year. “This year, close to 13 lakh hectares have been enrolled for insurance in Kharif. It was around 17 lakh hectares last year,” Rao said.

Insurance is must for farmers who borrow crop loans, he pointed out. “Farmers exhaust their credit at the end of the season when it is due for the Rabi crop. Because there’s no credit limit available, Rabi enrollments are affected. We’ve been telling banks that some reserve should be left so that Rabi farmers can also be covered,” he explained.

Another reason for the drop in insurance enrollment is that many farmers did not renew their loans anticipating the loan waiver. “We’ve been having problems with getting loanee farmers because they did not renew the loans, so the insurance premium couldn’t be deducted.”

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