Suicide of even a single farmer is a stigma and reveals distress, Madhya Pradesh Chief Minister Shivraj Singh Chouhan admitted during the National Conference on Crop Insurance here. He pointed out that the government will have to evolve a crop insurance policy under which it subsidises the premium.
To evolve the scheme that can be expanded as a national policy, Mr. Chouhan hosted the conference with experts, farmers, officials and insurance companies and is close to formulating a draft policy which ensures a minimum income for farmers allowing for natural calamities and fluctuations in market prices. Union Agriculture Minister Radha Mohan Singh is arriving here on Tuesday to give the Centre's stamp of approval to the draft policy.
Income security
Mr. Chouhan, who is credited with raising farm growth in the state to 22 per cent from 14 per cent in the last four years, is clear that farmers must be ensured a minimum income to secure them from weather-based risks and market fluctuations. “Everywhere in the world governments back agriculture to make it remunerative for growers,” he said while inaugurating the conference.
“The two main reasons for farmers' distress is damage to crop from weather and decline in the price of the produce. Any insurance policy should be individual field-based and should cover all agricultural, horticulture and commercial crops. Lone farmers must also be covered. Just giving compensation as we did this year for crop damage is no solution. The farmers must get remunerative price or a minimum income,” the Chief Minister later told journalists.
The draft policy suggests that the premium of the insurance scheme should be low enough to be affordable for farmers. In case of higher premium amount, the difference should be borne by the Centre and States. In the case of small and marginal farmers, government should pick up all of the subsidy. The indemnity level of compensations should not be less than 80 per cent.
Insurers reluctant
Insurance companies, however, appeared reluctant to cover the risks entirely. “The risk is very high. Government has to subsidise,” said Amit Bhandari, CEO of ICICI Lombard.
The risk in agri-insurance is too high as a product that is “under production” has to be insured say the insurance firms. “It is not an asset that is created,” said a consultant.
However, in a significant observation Dinesh Kulkarni of Kisan Sabha said instead of subsidies, the government should strengthen the minimum support price for farm commodities and reduce input costs of cultivation.
There is no national crop insurance policy so far and the government has been experimenting with various models on pilot basis.
“Just compensation for crop damage is no solution. Farmers must get a remunerative price or a minimum income”
