Hit by the floods in several districts, which have impacted standing crops, Punjab may join highly subsidised Pradhan Mantri Fasal Bima Yojana (PMFBY).
“We will soon discuss modalities of joining the crop insurance scheme of the centre,” Jaswant Singh, director of agriculture and farmers welfare, Punjab, told FE.
Singh said that currently the focus of the state government is to provide relief to farmers while according to initial projections 0.4 million hectare (Million hectare) out of 3.2 Mha crop area has been impacted by the floods due to excessive rainfall in the northern region.
The Punjab government has declared all 23 districts flood-hit.
Punjab’s past reluctance
Earlier the state had also cited the fact that there is huge financial burden on state exchequer while state has a robust irrigation infrastructure thus the risk level was far less than those in the country’s rainfed regions.
Under PMFBY aims at providing comprehensive risk coverage from pre-sowing to post-harvest stages of crops, farmers pay a fixed premium of just 1.5% of the sum insured for rabi crops and 2% for kharif crops, while it is 5% for cash crops.
The balance premium is equally shared between the Centre and states with the exception of north-eastern states where the premium is split in a 9:1 ratio between the Centre and states.
Since its launch in kharif, 2016, 27 states and union territories have implemented the scheme in several seasons. However, Bihar, Telangana, Andhra Pradesh, Jharkhand, West Bengal and Gujarat opted out of the scheme for factors including financial constraints. However, Andhra Pradesh and Jharkhand have re-joined it.
In November, 2022, Punjab had announced joining PMFBY, however subsequently it announced the state will have its own crop insurance scheme. In March, 2023, Chief minister Bhagawant Mann had announced that the state will soon come up with a crop insurance scheme.
Relief and compensation concerns
“If the crop insurance scheme was implemented, the farmers of Punjab, who have lost nearly four lakh acres of crops due to floods, would have received timely compensation through insurance claims, enabling them to meet their daily needs,” Ranjit Singh Jossan, vice president, the Basmati Rice Millers and Exporters Association, Punjab, said.
Jossan said the Punjab, being an agriculture-driven state, relies entirely on its crops for economic stability, and the lack of such a safety net raises serious questions.
According to the agriculture ministry, over Rs 1.82 lakh crore has been paid to farmers under PMFBY since its launch in 2016 as compensation which was five times of the total premiums of Rs 35,864 crore paid by them under the scheme.
“For every Rs 100 of premium paid by the farmers, they have received nearly Rs 500 as claims,” according to an official note.
Meanwhile several states including Bihar, Telangana, Nagaland, Mizoram and Ladakh are from the next rabi crop season, sources said.
To reduce delays in claim settlement, the ministry has made it mandatory for states to open escrow accounts for deposit of their premium share in advance from the current kharif season (2025-26).
The agriculture ministry has stated that PMFBY is the world’s largest scheme in terms of farmers applications/policies issue