Increase in farm insurance enrolments for two years in row
The PMFBY is the country’s main subsidized crop insurance scheme, where farmers pay between 1.5% and 2% of the premium, depending on crop cycles
The number of farmers opting for the central government’s flagship farm insurance scheme has recorded a jump for two years in a row, along with an improvement in other indicators, a review by the agriculture ministry showed, pointing to a rebound in a welfare programme that has long been hobbled by large inefficiencies.
A latest review of the Pradhan Mantri Fasal Bima Yojana by the farm ministry, up until the current summer cropping season, shows an increase of 22% in the number of enrolled cultivators at 24.9 million, the highest in six years, according to data seen by HT.
Besides, the total area insured, another key indicator, stands at 50 million hectares, the largest so far. Premium rates in the current cropping season dipped by 32%, which has saved ₹10,500 crore, the lowest level since the scheme’s launch, a sign the government has been able to negotiate better deals with insurance firms .
The PMFBY is the country’s main subsidized crop insurance scheme, where farmers pay between 1.5% and 2% of the premium, depending on crop cycles. The remaining premium is shared 50:50 between the Centre and state governments. In case of northeastern states, the Centre pays 90% of the premium subsidy.
Launched in June 2016, the PMFBY replaced a web of complicated, multiple farm insurance schemes, all running simultaneously, with a single countrywide plan. Yet, the scheme’s biggest drawback has been delays in payment of insurance claims to farmers, the most important consideration for cultivators.
To be sure, despite the improvements, outstanding claims worth ₹2,761.10 crore are still pending till 2021-22, the agriculture ministry told Parliament in July.
The PMFBY’s CEO Ritesh Chauhan recently told an event that constant evaluation of the scheme has resulted in the gains, including reduced actuarial costs.
Farmers have often protested long delays in compensation payouts, mainly due to administrative issues. In a key revamp of operational guidelines of the scheme, the Centre now releases its share of premium even if the states don’t. This change, the Centre hopes, will help to quicken settlements, an official said, seeking anonymity.
This year, the scheme has enrolled 13.8 million agriculturists with a subsidized farm loan, while 11.1 cultivators enrolled did not have any loans, making up a total of 24.9 million enrolments, or a jump of 22%, latest data show.
Last year, too, the number of farmers opting for the state-run insurance scheme saw a 25% increase at 20.4 million. The improvement in these markers came after two years of poor performance marked by exit of farmers in 2020 and 2021. In 2020, the number of farmers enrolled had dropped 23% to 23.7 million. The following year, the number plunged by 10% to 16.3 million.
“To process claims in a timely manner, the government is now considering satellite-based advanced technologies to assess crop damage,” the official said.