Agri Business

Farm insurance made voluntary after requests from farmers: PMFBY CEO

KV Kurmanath New Delhi | Updated on February 28, 2020 Published on February 28, 2020

No change in govt subsidy component in premium payout

The Government has asserted that the decision to make its flagship farm insurance scheme Pradhan Mantri Fasal Bima Yojana (PMFBY) voluntary was based on requests by farmers’ associations.

Contrary to views, the decision to tweak the scheme was taken to give farmers the freedom.

Ashish Kumar Bhutani, Chief Executive Officer of PMFBY, also dismissed reports that the government subsidy in the premium payout was being reduced.

“There is no change in the premium paid by the farmers. Their share will continue to be 1.5 per cent for rabi and 2 per cent for kharif seasons. The remaining part will continued to be paid by the State and Central Governments,” he said.

Bhutani made these comments while addressin a panel discussion on “How to risk-proof agriculture?” at the two-day BusinessLine Agri Summit being held here.

The recent decision by the Union Cabinet to tweak the agri insurance scheme by making it voluntary for the insurance-seeking farmers attracted sharp criticism.

States to provide data

On the delays in payout of insurance claims, the PMFBY CEO said the Centre had no role as it was the States in question that were required to provide data (on crop losses during natural calamities and drought) and pay their premium contribution to the insurance companies to settle the claims.

The States were supposed to provide the data in time to help the insurance firms assess and settle the claims. “Sometimes they take up to 12 months,” Bhutani said.

Unlike in motor vehicle insurance, where third-party assessement is made to estimate the losses, the States furnish the data after collecting the same from the villages.

Referring to recent changes mooted to address the delays in settlements, he said if the States failed to send the data before the cut-off date, the publicly available data would be considered for the estimates of the losses and extent of claims.

Butani said the claim settlement rates were very high at 85 per cent in the last three years. In Tamil Nadu, it was at 189 per cent and 163 per cent in Chhattisgarh. It was more than 100 per cent in seven to eight States.

Published on February 28, 2020
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