‘Make crop insurance a basic right for farmers’

The dominance of private insurers, their lack of adequate on-ground physical presence coupled with opacity in settlements are some factors that have not helped the Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme take off on expected lines.

With multiple gaps in the current crop insurance structure, experts have called for making crop insurance a basic right for farmers — universal, free and compulsory.

Many States have quit PMFBY for reasons including premium burden, operational challenges and farmers’ opposition. In absence of a universal effective crop cover for all farmers, these schemes are seen as a trial-and-error method.

Old wine in new bottle

Yogendra Yadav, President, Swaraj India, and National Convener of Jai Kisan Andolan, said that PMFBY was presented as if it was a brand new solution to an age-old problem. “Crop insurances in India have gone through 4-5 editions (in past two-three decades). This (PMFBY) is an improved edition but from the same old book. This won’t give result. The reasons why previous things had failed, and this one, are exactly the same,” Yadav said.

Many farmers are clueless about their insurers and process of insurance. Companies keep minimum physical presence to avoid direct contact with farmers, who have no fora to raise a complaint. Farmer leaders have blamed these private insurers of cornering super-normal profits from the premiums, while deliberately clearing only handful of claims.

Yadav suggested that for a more effective coverage, the crop insurance should be treated as a right to every farmer. “Just as we have Right to Education, make crop insurance universal, compulsory and free,” he said.

The governments may consider variations with partial contributions from the farmers depending on the nature of their crop and risk.

“The compensation under a compulsory insurance should be low enough for a farmer to survive in case of a damage. He pays for his minimum subsistence and not for the commercial worth of his crop,” he said adding that a farmer should be free to take an extra insurance for an amount equal to the yield multiplied by the MSP of the crop.

“Here, the government should pay 80 per cent and farmer pays 20 per cent — somewhat like the current PMFBY formula. But the farmers growing horticulture crops, or export-oriented exotic fruits are at a greater risk of financial loss in case of a damage. Here, the scheme should be reverse, where government pays 20 per cent subsidy, while farmer has to pay 80 per cent premium for the insurance, which covers the crop depending on its commercial value,” Yadav said.

For the on-ground implementation, there is a need for a credible model. P Chengal Reddy, Chief Advisor of Consortium of Indian Farmers Association, says, “The issue with the PMFBY is that it isn’t transparent and you can’t fix a responsibility for the claims settlement. They reject the claims or delay the settlement in a very irresponsible manner. Such models don’t benefit farmers.”

Yadav also suggested making compulsory onground presence for the insurance company representatives at the tehsil level and having an active centralised helpline number for grievances redressal. Use of mobile and digital technologies is believed to bring transparency in claims settlement and monitoring. The high risk agriculture can’t be left exposed to uncertainties, hence some form of insurance becomes a must. But who will take the call?

Independent insurer

Experts feel time is ripe for an independent, genuine and strong public sector insurance player.

“With so many conditions, private insurer will either charge exorbitantly high premiums or they will run away. So, we need to create an independent public sector crop insurance major, which will happen with a strong political will,” Yadav said. Such a public sector insurer should face social audits for efficiency and transparency.

Earlier this month, the BJP-ruled Gujarat scrapped the tenders issued for crop insurance companies under PMFBY and launched a State-funded crop insurance instead. This was done with a view to provide free insurance cover to all farmers of the State with nearly zero documentation requirements from the farmers.

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