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After a good run in 2016-17, marked by an increase in area and the number of farmers covered, the Centre’s ambitious crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY), lost pace last fiscal year.
The total number of farmers covered under the PMFBY in FY18 was 4.72 crore, against 5.5 crore in FY17. The total area covered was 496 lakh hectares, versus 551 lakh hectares in the previous fiscal year.
While data for Rabi 2017-18 are not out yet, the numbers for the Kharif season show claims-settlement of crop insurance policies is progressing at a snail’s pace.
Data from the Ministry of Agriculture show that of claims worth ₹15,948 crore received for Kharif 2017, only ₹4,275 crore was settled by insurance companies till the first week of May.
What’s going wrong?
Several factors have contributed to the scheme slowing down. One, insurers face a delay in receiving data on crop yields from the States. A case in point is the Kharif 2017 season; while the cut-off date for submission of yield data to insurance companies for the season was January 31, 2018, some States, including Chhattisgarh, Haryana, Rajasthan, Tamil Nadu and Telangana, delayed it by over a month. Andhra Pradesh and Madhya Pradesh took close to three months after the deadline, while Jharkhand and West Bengal had not provided the yield data till the first week of May. Also, in many cases, insurance companies do not agree on the yield data provided by the States, which results in disputes and delays in claims settlement.
The other problem is that the States do not pay their share of the premium on time, which means insurers are unable to process the claims. For Kharif 2017, States had to pay their share by December 2017 but many failed to do so.
Bihar, Madhya Pradesh, Telangana, West Bengal and Andhra Pradesh, among others, had not paid their premium for Kharif 2017 even till the first week of June, according to an official at a crop insurance company.
The delay is also because the Centre has opted for direct benefit transfer (DBT) of claims payment. For this, details of farmers’ bank accounts have to be provided to the insurers. This is often not done on time, which further delays the settlement.
From 2017-18, it has been mandatory for banks to register data pertaining to PMFBY customers on the government portal. Many banks in States such had not finished uploading the data even in the first week of May.
Further, insurers say, the drop in the number of farmers covered in FY18 could be because of the data moving online now, eliminating duplicate farmer records present in the previous year.
Insurance companies are hoping FY19 will be a good year for all with mandatory registering of farmer data, the push from the Centre for quicker yield assessment through use of technology, and a more efficient DBT process.
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