Crop insurance claims of ₹7,600 crore disbursed in Madhya Pradesh, after 16 months delay

Prabhudutta Mishra | Updated on: Feb 12, 2022
Shivraj Singh Chouhan, Chief Minister of Madhya Pradesh

Shivraj Singh Chouhan, Chief Minister of Madhya Pradesh

Chouhan says State government is carrying out end-to-end computerisation of crop insurance

After waiting for 16 months, over 49 lakh farmers in Madhya Pradesh on Saturday received crop insurance claims of ₹7,618 crore under the flagship Pradhan Mantri Fasal Bima Yojana (PMFBY) after the State government finalised the yield data facilitating the disbursal. The finalised claim amount is 107 per cent of the gross premium of ₹7,129 crore collected during 2020-21, which is beneficial for the State government as the financial burden contained within the agreed liability of Agriculture Insurance Company (AIC).

During 2020-21, out of ₹7,129 crore gross premium, farmers’ share was ₹897.06 crore while the Centre and State’s share was ₹3,115.97 crore, each, according to PMFBY data.

80:110 plan

Madhya Pradesh had implemented a 80:110 plan in both kharif and rabi seasons of 2020-21 under which AIC’s potential losses were circumscribed. In this case, AIC is not obliged to pay claims above 110 per cent of the gross premium and the State takes responsibility beyond that threshold. The insurer will keep a minimum 20 per cent of premium when claims fall below 80 per cent and refund the remaining to the State government under this formula. In case of claims between 80 and 110 percent, neither the State pays extra nor gets refund as the entire responsibility lies with the insurer.

At an event on Saturday in Betul, while announcing the disbursal of claims in the bank accounts of farmers who had suffered crop losses, Chief Minister Shivraj Singh Chouhan said, “We have successfully registered 4.43 crore farmers in the last five years after the launch of PMFBY and have disbursed an aggregate claim amount of ₹16,750 crore to 73.69 lakh farmers until 2019-20.”

The claim to premium ratio in Madhya Pradesh was 157 per cent in 2019-20 — 213 per cent in kharif and 54 per cent in rabi — whereas about 26 lakh farmers had received the claims amount of ₹5,812 crore. Soyabean farmers in the State had faced crop losses due to heavy rains for two successive years in 2019 and 2020.

Higher claims probable

Some experts have said that the claims could be more than what has been approved for 2020-21 as the 30 districts of west MP had received 12 per cent more than normal rain in the 2020 monsoon season (June-September), causing extensive crop damage. While Indore received 46 per cent above-normal rains, it was 30 per cent more than normal, each, in Bhopal, Raisen and Jhabua, 53 per cent more in Dewas, 37 per cent in Sehore and 36 per cent in Chhindwara.

“The State was not in a position to provide more after contributing over ₹3,000 crore as its share in premium subsidy. Actual losses could have made the state pay an additional ₹2,000 crore which was financially not possible,” a source in the government said. There should be some provision to bear the burden by the Centre if crop losses go beyond a threshold as States have limited resources, the official added.

Chouhan said the State government is carrying out an end-to-end computerisation of crop insurance where the process of insurance unit determination is completely online by integrating with land records. Though he said that the government has been using remote sensing technology to estimate the average yield from the field, he was silent on the reason of delayed disbursal of claims.

Published on February 12, 2022
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