The Hindu Business Line : A `cropped' insurance plan

FARMERS in this drought-affected area who took loans for paying their premium for crop insurance last year, are regretting it now. Many of them complained they were not paid any insurance even though their crops had failed.

Mr Ramakant Kulkarni of Sahyog Nirmiti, a voluntary organisation based in this village, said that in a survey carried out by his organisation, over 90 per cent of the farmers had insured their crops. There was very little rain last year and even crops like jowar hardly grew.

In Arbali village, too, in Tulzapur taluka of Osmanabad district, not a single farmer has been paid. All the farmers are covered for both kharif and rabi seasons.

Former Sarpanch, Mr Suban Nadaf, said that he had paid the premium to cover crops like jowar, and he had to pay it out of daily wages. ``Though I was paid insurance in the previous years, last year despite the crop failure, when I ask for payment, they say come later.''

Eleven districts are drought-affected in Maharashtra and a population of over two crore is affected. Osmanabad, Beed and Solapur are among the critically affected areas and this is precisely where the complaints are coming from.

In 1985, an all-risk comprehensive crop insurance scheme was launched for major crops to coincide with the Seventh Five Year Plan. This was later replaced in rabi, 1999, with the National Agricultural Insurance Scheme (NAIS).

Official sources said in kharif 2002-2003, Rs 25 crore was distributed in the State to 1,98,877 farmers. However, the number of farmers covered by crop insurance was 17,93, 329 covering an area of 2,27,5067 hectares. In rabi 2002-03, Rs 16.33 crore was disbursed to 1.21 lakh farmers. But 2,47,677 farmers were covered for the winter season.

Food crops covered under the scheme include cereals, millets, pulses and oilseeds. The scheme provides comprehensive risk insurance against yield losses in drought, dry spells apart from natural calamities and pests and diseases.

In Maharashtra, the crops covered in 2002 were (for kharif) paddy, jowar, bajra, maize, ragi, groundnut, niger, soyabean, sesamum, sunflower, greengram, black gram, red gram, cotton and onion and for rabi, summer paddy, wheat, jowar, sunflower, summer groundnut, safflower and onion.

Sources said the limitation with this scheme was that it had an area approach or defined areas for each crop, which could be a gram panchayat, mandal, block taluka etc. There are also three levels of indemnity namely 90 per cent, 80 per cent and 60 per cent of the last five years average yield, corresponding to low risk, medium risk and high-risk areas, respectively.

The threshold or guaranteed yield for a crop in an insurance unit will be the moving average based on the past three years average yield in case of rice and wheat, and five-years' average yield in case of other crops, multiplied by the level of indemnity. Crop-cutting experiments conducted by circle-wise agriculture, revenue and district departments were used to arrive at average yields.

A revised proposal was submitted by Maharashtra to the Centre last year but nothing had come of it.

Sources said even after making huge payments, there were several complaints. The area was the unit of insurance and if the whole area is affected, then only the claims are payable.

In areas like Osmanabad for instance, which are drought affected since three years, the threshold yield would be drastically low already and this meant that in low yield conditions, farmers might not be paid insurance.

Claims were always higher than the premiums paid and the scheme was running at a loss.

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A `cropped' insurance plan