Shambhu Singh from Sonpur village, who has around 46 acres of agricultural land, is quite upbeat and has prepared his land for kharif soyabean crop that would be sown soon with the onset of monsoon. Many farmers like Singh in this village are optimistic about kharif crops including soyabean, pulses and paddy this year despite deficit monsoon and localised hailstorm adversely impacting the crop last year.
The optimism comes from the newly launched Pradhan Mantri Fasal Bima Yojana (PMFBY) which comes with not only a lower premium but also faster settlement of dues in a case of crop losses. “The promise of faster settlement and lower premium besides coverage of local calamity like hailstorm and failed sowing is really attractive for farmers like us,” Singh told FE.
The Madhya Pradesh government has already short-listed three insurance companies — state-owned Agriculture Insurance Company of India (AIC) and two private sector players ICICI Lombard and HDFC Ergo — for providing crop insurance across 51 districts of the state. AIC has been asked to implement PMFBY in 31 districts. The remaining districts have been divided equally between private sector majors.
For kharif soyabean crop this season, the ‘scale of finance’ for this district has been fixed at R17,600 per hectare for which farmers have to pay only R352 towards premium by August 16. Similarly, the scale of finance arrived in consultation with bankers, insurance companies, government officials and farmers, has been fixed at R22,500 per hectare (groundnut), R17,100 per hectare (moong) and R17,100 per hectare (urad). Similarly scale of finance for each of the kharif crops has been fixed for each of the 51 districts taking into various factors such as yield, irrigation availability and vulnerability to climate change.
According to Rajesh Rajora, principal secretary (agriculture) of Madhya Pradesh, earlier only around 27% of one crore farmers in the state, who had availed agricultural credit, were covered under the crop insurance scheme. “But we have set an ambitious target of covering at least 50% of the farmers in both kharif and rabi seasons in the next three years,” Rajora said. However, he admitted that the challenge is to include those farmers who have not availed agricultural credit from banks under the PMFBY.
According the state agriculture department data, the earlier crop insurance schemes — National Agricultural Insurance Scheme and Modified National Agricultural Insurance Scheme — which were discontinued following the launch of PMFBY had a sluggish start in the state during 1999-2012 as the state allocated only R1,900 crore during these 13 years.
However, during FY13-FY15, the state government has allocated more than R5,800 crore towards crop insurance. As per the budget estimate of FY17, Madhya Pradesh has allocated R1,200 crore towards PMFBY.
Under the PMFBY which being implemented from kharif season of 2016, the premium paid by farmers had been reduced to 2% of the insured value for the more rain-dependent kharif crop and 1.5% for the rabi season, compared with 3.5-8% charged in the earlier scheme. The subsidy would be borne by the Centre and the state government concerned equally.