UNSEASONAL rain and hailstorms this year affected crops in several states; the worst affected were the wheat growers, who faced the vagary of nature close to reaping. However, farmers in states that have opted to be part of the Pradhan Mantri Fasal Bima Yojana (PMFBY) may look forward to some compensation.
PMFBY is mainly implemented on an ‘Area Approach’ basis. Admissible claims are worked out and paid directly to the insured farmer’s account by the insurance companies on the yield data. The date is based on the requisite number of Crop Cutting Experiments (CCEs), per unit area, furnished to such insurance companies by the concerned state Government. This is fixed as per claim calculation formula envisaged in the Operational Guidelines of the scheme subject to receipt of state Government’s requisite share in premium subsidy.
High premium woes
PMFBY was launched with an aim to address problems of high premium rates for farmers and reduction in the sum-insured due to capping. Incidentally, losses due to localised risks of hailstorm, landslide, inundation, cloudburst and natural fire and post-harvest losses due to cyclone, cyclonic or unseasonal rains and hailstorms are calculated on individual insured farm basis.
| Year | Total farmer applications (in lakh) | Farmer premium (in crore) | State premium (in crore) | GOI premium (in crore) | Claims paid (in crore) |
|---|---|---|---|---|---|
| 2016-17 | 581.7 | 4085.1 | 8944.6 | 8648.7 | 16795.5 |
| 2017-18 | 531.8 | 4172.0 | 10239.8 | 10055.9 | 22065.5 |
| 2018-19 | 582.0 | 4695.7 | 12676.6 | 12316.7 | 228651.8 |
| 2019-20 | 616.2 | 4482.0 | 14321.1 | 13525.9 | 27361.6 |
| 2020-21 | 623.2 | 4044.9 | 14620.5 | 13034.0 | 20423.9 |
| 2021-22 | 832.8 | 3772.1 | 13929.9 | 12562.1 | 14716.9 |
| Year | Farmer applications (in lakh) | Area insured (in lakh hectare) | Farmer premium (in crore) | Claims paid ((in Rs crore) |
|---|---|---|---|---|
| 2020-21 | 623.19 | 495.43 | 4045.27 | 20594.41 |
| 2021-22 | 831.76 | 459.00 | 3703.81 | 14920.82 |
These claims are assessed by a joint committee comprising representatives of the state Government and the concerned insurance company. Altogether, 19 general insurance companies have been empanelled for implementation of the scheme. Among these incidentally, one merged with another empanelled insurance company in 2021.
A voluntary scheme
Though the concept of crop insurance was there, it was not as much in practice till some time back. PMFBY was introduced from the Kharif (crops grown in the rainy season, i.e., June to September) season 2016. The scheme is voluntary where states are free to subscribe under the scheme keeping in view their risk perception and financial considerations.
Also, it is up to the farmers who can decide whether to enroll themselves. The scheme is implemented through the empanelled general insurance companies.
Minister of Agriculture and Farmers Welfare Narendra Singh Tomar said in his written reply to Rajya Sabha late last month that for every Rs. 100 of premium paid by farmers under PMFBY, they have received about Rs. 514 as claims. While answering a question, the minister added that since the implementation of the scheme in 2016, around 38 crore farmer-applicants have been enrolled and over 12.37 crore (provisional) have received claims.
Regular revamp
From the experience gained and based on views and demands of stakeholders, the scheme has been reviewed, modified, revised, or revamped from time to time. The revamped scheme effective from Kharif season 2020 has many features which include voluntary participation for all farmers, selection of insurance companies by the states for three years in a go, two-step process of crop yield estimation, use of smart sampling technique through satellite data for crop cutting experiments, etc.
The features have been included keeping in view the benefit of farmers and flexibility in implementation to the states.
