The implementation of the Centre’s latest crop insurance scheme in Tamil Nadu, which came in for severe criticism in certain quarters recently, has, however, been commended in a research paper.
The paper, published by the Indian Council for Research on International Economic Relations (ICRIER) last month, stated that “most of the farmers in Tamil Nadu received claims for their crop damage caused by drought in that season [rabi 2016-17]. This stands as an outstanding example that could be emulated by other States to provide yield data and premium subsidy on time to insurance companies.” [the rabi season is between October-March].
The scheme in question is Pradhan Mantri Fasal Bima Yojana (PMFBY), which was launched during kharif season [April-September] in 2016.
It stated that the total claim paid to farmers during the rabi season 2016-17 was ₹2,414 crore against the gross premium of ₹1,232 crore with the premium to claim ratio of 1.96 (196%).
The yield data on crop cutting experiments (CCE ) for rabi 2016-17 was furnished to insurance companies in time and the State government paid its share of premium subsidy to the insurance companies.
Citing the example of Tamil Nadu, authors of the paper Ashok Gulati, former Chairman of the Commission for Agricultural Costs and Prices; Siraj Hussain, former Secretary of the Union Ministry of Agriculture and Farmers’ Welfare and Prerna Terway, Research Associate at ICRIER, said timely submission of yield data of the CCEs and payment of premium subsidy to insurance companies would expedite the process of claim settlements.
Delay in settlement
The authors, however, faulted Tamil Nadu and Gujarat for having submitted yield data late during kharif 2016 season, causing a delay in insurance companies settling the claims of farmers. A senior official of the Tamil Nadu Agriculture Department attributes it to the State joining the scheme late.
The research paper also commends Karnataka for having designed a portal, ‘Samarakshane,’ which is dedicated to crop insurance, providing information relating to the PMFBY.
Regarding the allegations that insurance companies have made large profits at the cost of farmers and the government as gross premium collected is far greater than claims paid to farmers, the authors contend that the kharif 2016 marked a normal monsoon with only 3% shortfall at the all-India level. It would be common in normal rainfall years that claim payouts “are likely to remain lower than premiums collected,” whereas in bad years with drought or floods, “the claims may even exceed premiums collected.”
Arguing that the effectiveness of the scheme cannot be judged on the basis of data of one year, the specialists say that one has to wait for a cycle of about five years before coming to any conclusion. As regards the payment of measly sums paid towards claims of some farmers in Dindigul and Nagapattinam districts, the official says “typographical errors” by an insurance company in calculating the coverage were the reason and this would be rectified soon.
