Agri Business

Farmers see red over tweaks to crop insurance scheme

TV Jayan New Delhi | Updated on February 20, 2020 Published on February 20, 2020

Representative image.   -  BusinessLine

See premature death of the scheme

The Centre’s decision to reduce its share in premium subsidy for its flagship crop insurance scheme — PM Fasal Bima Yojana (PMFBY) — to premium rates of 30 per cent in unirrigated areas and 25 per cent in irrigated is criticised by many with some saying the move foretells the impending death of the scheme.

On Wednesday, the government decided to not to pay the Centre’s contribution to the PMFBY to farmers in those districts where crops have premium rates more than 30 per cent in unirrigated and 25 per cent in irrigated regions of the country. The Centre also decided to enhance its share in PMFBY premium subsidy to 90 per cent for north-eastern States from the existing 50 per cent. It also made the scheme voluntary to farmers.

There are nearly 40 districts in the country — mainly in Gujarat and Rajasthan — where PMFBY premium rates are beyond 30 per cent. From next kharif season onwards, these districts with higher premium rates will not get the Central subsidy.

Currently, farmers growing notified crops in different parts of the country — barring in a few States like Punjab and Karnataka — pay 1.5 per cent to 5 per cent premium for crop risk cover under PMFBY, with Central and State governments pooling the rest of the premium equally. Among other things, the government decided to make the scheme voluntary as well.

“This is like throwing the baby with bathwater. They implemented the PMFBY scheme barely for three years. We had problems with it since its inception. We wanted the government to extend the coverage to tenant farmers. Now instead of expanding it, the government is trying to shrink its scope further by increasing the burden of State governments,” said Vijoo Krishnan, Joint Secretary of the All India Kisan Sabha (AIKS), the CPIM-backed farmer organisation.

Krishnan said it was not clear who may have to shoulder the burden — the State governments or the farmers. Either way, this scheme will not go much far, he observed. If the States refuse to put in the premium subsidy for those whose premium rates are higher than 30 per cent, the premium to be paid by farmers would go up substantially. “The farmers will eventually withdraw from the scheme,” he said.

An official from Agriculture Ministry had earlier talked of the need for moving the districts that have higher premium rates from PMFBY to other crop insurance schemes like Restructured Weather-based Crop Insurance Scheme, which have lesser financial implication for the government.

Kavita Kuruganti of Hyderabad-based Alliance for Sustainable and Holistic Agriculture, said instead of improving upon the existing scheme, the government is trying to kill it.

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Published on February 20, 2020
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