The central government's flagship crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMBFY), has good provisions but its implementation is flawed, says the Centre for Science and Environment (CSE), a non-profit organisation.
New Delhi: The CSE has prepared a report by assessing and analysing various aspects of the scheme, which points out that the scheme is not beneficial for farmers in vulnerable regions like Marathwada and Bundelkhand. The report highlights several shortcomings such as irregularities in assessment of crop loss, inadequate and delayed compensation, high actuarial premium rates, massive profits to insurance companies, poor execution.
Addressing media after release of the report, CSE Deputy Director General Chandra Bhushan said the PMBFY was a "far superior scheme than the previous agricultural insurance schemes" but its vision was diluted at state level and its implementation was "seriously compromised". "PMFBY is a classic case of poor implementation of a good scheme. It will be worst ever mistake if we think that crop insurance would solve all agrarian problems. It should be the last resort," Bhushan said. The CSE's report was based on the field study in Haryana, Tamil Nadu and Uttar Pradesh, and national level engagement with various stakeholders including farmer and farmers organisations, insurance companies and government departments, Bhushan added.
As per the report, assessment of crop loss remains a major concern due various factors such as inaccurate sampling work by agriculture officers, lack of trained outsourced agencies, corruption during implementation and non-utilisation of technologies like smart phones and drones to improve the speed and reliability of such sampling. It also said that the claim payment to farmers was inordinately delayed or refused as insurance companies did not investigate losses due to a localised calamity. "Only 32 per cent of the reported claims were paid out by insurance companies, even when in many states the governments had paid their part of premium," reads the report.
It also stated insurance companies charged high actuarial premium rates, average 12.6 per cent, which was highest ever. Actuarial rate is an estimate of the expected value of future loss. "The average actuarial rate in Gujarat was 20.5 per cent, in Rajasthan 19.9 per cent, and in Maharashtra 18.9 per cent," it points out. As per one of the conclusions given in the report "The PMBFY is not beneficial for farmers in vulnerable regions". Bhushan said their analysis showed that farmers in Bundelkhand and Marathwada might not get any claim even if more than half of their crops were damaged. For farmers in vulnerable regions such as Bundelkhand and Marathwada, factors like low indemnity levels, low threshold yields, low sum insured and default on loans make PMFBY a poor scheme to safeguard against extreme weather events," he said.
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