The Agriculture Ministry has approached the Finance Ministry with proposals to make provisions to punish delays in crop insurance claim payouts, and also to give incentives to those who settle them before the deadline.

“We want to encourage crop insurance companies and State governments that have to provide yield data, based on which crop assessments are done, to come forward to expedite the payments due to farmers,” said Radha Mohan Singh, Agriculture Minister .

“As per our proposal, whoever is causing the delay [in settling the claims] will be asked to pay the affected farmers the claim amount, together with a 12 per cent interest for the delayed period, Singh told BusinessLine .

“We are also toying with the idea of giving incentives to those who help hasten the process of claims settlement,” said Singh. But he did not elaborate on what sort of incentives would be given if the settlements are done well in advance.

Under the operational guidelines of the Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016-17, the State government is responsible for providing yield data captured through crop cutting experiments (CCEs) to insurance companies. Once the companies received the yield data, which is used for the damage assessment, the claims need to be settled within three weeks from the date of data receipt.

Delays caused

But there have been inordinate delays in settling the claims. For instance, in a written answer in Rajya Sabha last month, the government said that during kharif 2017 season, claims worth ₹16,448 crore were estimated and ₹13,768 crore approved. Of this, only claims worth ₹11,899 crore have been settled by the insurance companies.

The delay in settlement of claims was among the major reasons why there was a drop in the number of farmers going in for PMFBY. In 2017-18, there was a drop of 17 per cent in enrolment for the crop insurance scheme.

The Minister, however, is hopeful that these issues will be resolved with the wider use of technology in CCEs. The Ministry has already engaged as many as nine agencies, including Ahmedabad-based Space Application Centre; National Remote Sensing Centre, in Hyderabad; and private weather management companies such as Skymet and Weather Risk for carrying out pilot studies for different crops across the country.

These pilot studies were to be carried out during the current kharif season and the forthcoming rabi season, and the organisations have been given time till February next year to submit their final reports.

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