Pradhan Mantri Fasal Bima Yojana insurance scheme to cover higher number of farmers in Kharif 2016

More farmers, mostly in states such as Andhra Pradesh, Chhattisgarh, Gujarat, West Bengal, Karnataka, Maharashtra, Madhya Pradesh and Uttar Pradesh, have been covered under the NDA’s government’s flagship Pradhan Mantri Fasal Bima Yojana (PMFBY) in Kharif 2016, as compared with crop insurance coverage provided in the previous year.

Sources told FE that more than 3.66 crore farmers of the estimated 14 crore in the country were enrolled under PMFBY in kharif, 2016 against 3.09 crore farmers enrolled with the crop insurance scheme in kharif, 2015. However in states including Bihar, Odisha, Telangana, Rajasthan and Tamil Nadu, a lower number of farmers have been covered under PMFBY in Kharif 2016 compared with previous year.

“The scheme has provided coverage to 3.66 crore farmers (26.50%) and at this rate it is likely to exceeding the target of 30% coverage for both kharif and rabi seasons in 2016-17,” an official statement recently stated.

According to an agriculture ministry note, the performance in the kharif season was better despite the fact that there were teething issues to begin with. “For instance, many states did the bidding process for selection of the insurance companies for concerned clusters for the first time and consequently, the notification of the scheme was delayed in a number of states,” the note stated.

During last year’s rabi season, 167.47 lakh farmers were covered under crop insurance. In the ongoing rabi season, 15 states and UTs have issued notification for providing crop insurance to farmers, the last date for opting for crop insurance is December 31.

For PMFBY, finance minister Arun Jaitley had allocated R5,501 crore in the 2016-17 Budget against R2,995 crore allocated for various crop insurance schemes in the last financial year. However, under the revised Budget estimate, the centre would provide R13, 396 crore for the implementation of PMFBY in the current financial year.

Launched by the Modi government this January, PMFBY stipulates a uniform premium of 2% to be paid by farmers for kharif crops, and 1.5% for rabi crops. The premium for annual commercial and horticultural crops will be capped at 5%.

The major subsidy burden for rolling out crop insurance would be borne by both the states and the Centre. Subsidy from the government would now be ‘unlimited’ and grow a steep 183% to R8,800 crore by FY19.

The Centre had earlier named state-owned Agriculture Insurance Company of India (AIC) and 10 private companies, including ICICI-Lombard General Insurance, HDFC-ERGO General Insurance, IFFCO-Tokio General Insurance and SBI General Insurance, for the implementation of the mega scheme.

Only 20 million of an estimated 140 million farmers in the country — earning for a population four-five times as many — had crop insurance cover in 2014-15, even as the facility was just against the cost of cultivation and barely provided any income protection.