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Curbing data fudging, key to success of crop cover plan: Experts 

The Hindu Business Line , Feb 22, 2018

Government officials and industry on Wednesday expressed serious concerns about the manipulation of crop yield data by vested interests and said the mistrust arising out of such fudging may mar the success of the ambitious crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY).

“The credibility of data is very important. The manipulation of data will lead to the loss of credibility of the scheme,” said Ashok Dalwai, CEO of National Rainfed Area Authority, while addressing a national conference on agriculture insurance at FICCI.

Ensuring data integrity and data accuracy has become a major challenge, Dalwai said.

PMFBY was launched by the NDA government in 2016. Under the scheme, farmers have to pay only 1.5 to 5 per cent of the premium amount depending on the crop and the rest is equally shared between the Central and State governments.

Misrepresentation of data

Ashish Bhutani, Joint Secretary in the Agriculture Ministry said the PMFBY guidelines are being modified to ensure all required data and the process to assess the crop damage was done faster and in a transparent manner.

One of the key changes being proposed was to make insurance companies co-observers during crop cutting experiments (CCE), which are being done to estimate the crop yield.

A working paper prepared by the Indian Council of for Research on International Economic Relations (ICRIER), released on the occasion, said the discussions with experts revealed there were large scale data manipulations in some cases while conducting CCEs.

According to ICRIER, the number of CCEs to be conducted under PMFBY would be around 30 lakh (20 lakh in kharif and 10 lakh in rabi), but the total CCEs carried out in 2016-17 was 9.27 lakh.

“For example there is egregious case of Rajkot district in Gujarat in kharif 2016 where it is claimed that the yield of groundnut was largely underestimated which made insurance companies liable to pay exaggerated claims to farmers,” the ICRIER report said. Industry experts, on other hand, said the yield was reported to be 5 quintals/ha as against actual estimated yield of about 12 quintals/ha, he said.

Rampant malpractices

“If the government wants PMFBY to succeed, it has to ensure transparency in the conduct of CCE and prevention of malpractices,” ICRIER said adding that what reported from Rajkot was “nothing short of a fraud in the name of crop insurance.” Dalwai also hinted at similar plausible malpractices in 40 districts across the country — which he did not name — that have been making a large number of insurance claims year after year.

He said farmers and farmer associations should stop comparing the premia that insurance companies received and claims that they paid out on yearly basis.

The objective of a crop insurance scheme was to help farmers offset their losses in a bad year. In that sense, the success of a scheme like PMFBY should be measured a block of 5 or 10 years, he said.

“People should stop looking at crop insurance like mutual fund investment,” Dalwai said.

Crop area under PMFBY

Both the government and industry admitted that bringing 50 per cent of gross cropped area in the country under the insurance cover by end of 2018-19 — as suggested by Prime Minister Narendra Modi while addressing a conference on Doubling Farmers’ Income on Tuesday — may be a huge challenge.

“The total crop area brought under PMFBY currently was only 30 per cent and increasing the coverage to 50 per cent would be a herculean task,” said Ajay Singhal, a senior official with the state-owned Agriculture Insurance Company of India.

Another problem faced by the insurance industry was the timely release of premium subsidy, particularly by the State governments, he said, adding that many of them were finding it difficult to foot the bill, Singhal said.

 

 

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