New crop insurance scheme to cover 50% of farmers

The Union government's ambitious crop insurance scheme for farmers will be named 'Bhartiya Krishi Bima Yojana' and will aim to cover about 50 per cent of farmers in the next two-three years.

At present, around 23 per cent of total cropped area of 194 million hectares is under insurance.

Officials said, according to the final draft of the Cabinet note on the scheme, banks have to play a big role in ensuring its success.

Banks, according to the Cabinet note prepared by the ministry of agriculture, have to mandatorily credit the claim received by insurance companies into famers' bank accounts within 14 days. That apart, banks have also to ensure that all farmers who have taken crop loans against notified crops are compulsorily insured. At the same time, those who have not taken crop loans, but want to avail the benefit of a crop insurance get the same. Banks have also to ensure that crop loans are disbursed to farmers according to the guidelines laid down and ensure that funds so allocated are properly used by farmers.
 

The average premium rate for farmers under the new scheme will be a maximum of 2.5 per cent of the sum insured - it can be even lower - while the Centre's subsidy would go up to 90 per cent the premium.

In the new scheme, assessment of farms for calamities such as hailstorm and unseasonal rains would be done to ensure that each individual farmer gets an insurance, even if the damage is highly localised.

That apart, in the scheme, claims have to be mandatorily settled within 30-45 days of damage assessment and pictures taken through smart-phones, mobiles and tabs of the crop cutting data would be considered as valid proof of loss.

"This would help in reducing the time for settlement of claims," the official said.

"I feel government should differentiate between insurance and compensation, and insurance should just not be a risk mitigating strategy, but should also give some incentive. Also, crop assessment has to be accurate, or else, those who don't deserve get all the claims," Ajay Jakhar, chairman of Bharat Krishak Samaj (Indian Farmers Forum) told Business Standard. He said, apart from accurate assessment, crop insurance should be linked to Aadhar to check duplicity.

Sudhir Panwar, president of Kisan Jagriti Manch and member of the Uttar Pradesh Planning Commission said that the unit of measurement of claim should be the individual farmer and not a village, as is the practice now, and claims regarding yield loss due to pest attack should also be included in the scheme.

"As of now, claim settlement in agriculture is less than that of health, which needs to be improved. However, too low a premium might act as a deterrent for companies to participate," Panwar said.