Farmers are not deriving the promised benefits under the Centre’s crop insurance scheme, and instead it is private insurers who are profiting, the All India Kisan Sabha alleged on Wednesday.

Citing statistics given by the Agriculture Ministry in the Rajya Sabha last month, Hannan Mollah, General Secretary of the All India Kisan Sabha, questioned the implementation and even the intent behind the Pradhan Mantri Fasal Bima Yojana.

According to the Agriculture Ministry, ₹21,500 crore had been collected as premium income under the scheme, and claims had been made for ₹4,270.55 crore, which is less than 20 per cent. But the actual claims paid out to farmers were only ₹714.14 crore — which is about 3.31 per cent of the premium income.

Under the farmers have to pay only a portion of the premium — 2 per cent for kharif crops, 1.5 per cent for rabi crops and 5 per cent for annual commercial and horticulture crops; the rest of the premium is paid by the Central government and State governments.

Effectively, said Mollah, private insurance companies were pocketing nearly 97 per cent of the premium as profits.

Currently, about eight companies, including ICICI-Lombard General Insurance, HDFC-ERGO General Insurance, IFFCO-Tokio General Insurance, Reliance General Insurance, provide insurance under the scheme.

“Private insurance companies are very happy with this scheme as it brings them high returns,” he said. The farmers’ body, affiliated to the Communist Party of India, demanded that such profit realisation should be checked.

“Even if the full claim amount had been disbursed to farmers, these companies would have appropriated more than 80 per cent of the premium income,” he said.

In his Budget speech, Finance Minister Arun Jaitley increased the allocation for the scheme by 140 per cent to ₹13,240 crore from ₹5,500 crore in the last fiscal.

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