Farmers have for long been ruing the delays in settling crop insurance claims. Now, they find a supporter in the form of Insurance Regulatory and Development Authority (IRDA), which has asked governments and other agencies to speed up the process of settling the claims.

The delays are hurting farmers badly, the regulator said at a meeting with senior officials of the Department of Agriculture here last week .

“Our view is that there is an urgent need to improve the situation as the claims of a particular crop season are being settled almost after the expiry of the subsequent season. For example, claims of the kharif season are being settled only in the next kharif season,” M Ramprasad, Member (Non-Life), IRDA, told Business Line here.

S Malla Reddy, Vice-President of All-India Kisan Sabha (AIKS), echoes this view. “If something bad happens to the crop this year, the farmers get compensation only next year. Also, the amount they get is too small to give them any succour,” he said.

Crop productivity The reasons for delay in claims settlement are many, which include the crop-cutting experiment process. This experiment is done in select areas by the Department of Agriculture and insurance company officials to arrive at crop productivity.

This would be used as a benchmark to arrive at any decision on crop failure to enable payment claims. “As of now, the data are being used for various purposes and have to be shared by the Central and State governments. All this is resulting in the delay,” the IRDA member said.

It is not just about the delayed payments of the sum assured. The premium and the number of crops that are left out of the cover too are major issues that torment farmers.

Premium factor Malla Reddy said governments should take care of the premium. “The Central and State governments should bear the burden equally. They should take the village as a unit for calculation of crop losses. They should also change the way they calculate the loss,” he said.

The losses are assessed based on a threshold value (average crop value of five years), leaving scope for skewed numbers.

“Premiums are so high that farmers are reluctant to go for insurance cover. Take turmeric, for example. They are charged ₹3,681 as premium for an acre. And for chillies, it is ₹3,086. Unable to bear the cost of premiums, farmers prefer to stay away,” he said.

comment COMMENT NOW