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State govts to blame for issues in crop insurance scheme: Agriculture ministry 

live mint , Feb 22, 2018

The prime minister’s flagship crop insurance scheme, which has seen an impressive rise in coverage and sum assured since its launch in 2016, is facing a number of challenges that are delaying claim settlements for farmers, a senior agriculture ministry official said on Wednesday.

The Pradhan Mantri Fasal Bima Yojana (PMFBY) has seen a substantial rise in coverage and sum assured despite 2016-17 being a normal monsoon year but after nearly four seasons of implementation, several challenges have cropped up, Ashish Bhutani, joint secretary at the agriculture ministry, told a national conference on agriculture insurance organized by industry lobby FICCI.

“The biggest challenge we face is the conduct of crop cutting experiments which many states are unable to do in a short window of time,” Bhutani said. Companies have also objected to possible fudging in crop cutting experiments (used to estimate losses), “so we have put in the provision of companies co-observing these experiments,” he added.

“There are gaps in many states in implementing the guidelines of the scheme in letter and spirit... and those have led to payment delays (to farmers) in certain states,” Bhutani said.

He said a lack of historical data has hiked up premiums in some areas, and states are not doing enough to provide data to companies. “Another issue which is a challenge for us is the delay in release of subsidies (towards premium) by state governments which is delaying payment of claims to farmers,” Bhutani said.

Bhutani, who is steering the flagship scheme at the centre, also said the ministry is ready with a new portal which will ensure transparency and end-to-end implementation of the scheme from communication between states and companies to claim settlement. “The government is soon going to issue a revised set of guidelines to address current challenges and we are also thinking of setting up a dispute resolution mechanism to resolve conflicts between state governments and companies,” he said.

While the top official from the agriculture ministry blamed states for the glitches in the PMFBY, Dharmendra Sharma, a consultant to the state of Haryana on crop insurance, told the conference that despite collecting large premiums, insurance companies are not putting in place any ground infrastructure (required for grievance redressal and assessing crop losses in individual plots). “Before pointing out flaws of state governments, companies should also invest but they are acting as run-away businesses,” Sharma said.

An evaluation of the PMFBY by the Delhi-based Indian Council for Research on International Economic Relations, released at the conference, said that even two years after the scheme was launched, use of technology such as mobile devices or remote sensing to estimate crop losses has been limited. The study also said that a scheme like PMFBY, which gets nearly a third of the resources of the department of agriculture and cooperation, is run by just two senior officers and deserves a dedicated team of professionals.

Since its launch in 2016 kharif, the PMFBY spruced up coverage from 26% of gross cropped area in 2015-16 to 30% in 2016-17. The government’s goal is to bring 50% of the crop area under insurance by 2018-19.

The budget presented earlier this month raised the allocation under the crop insurance scheme from Rs10,698 crore in 2017-18 (revised estimate) to Rs13,000 crore in 2018-19 (budget estimate).



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