Pradhan Mantri Fasal Bima Yojna (PMFBY), a new Crop Insurance Scheme, was announced in New Delhi on Makar Sankranti Day, 14th Jan, 2016. The Cabinet of Central Government gave its approval for the scheme a day earlier.
It is a life changing plan for Indian farmers.
It replaces NAIS (National Agriculture Insurance Scheme) and MNAIS (Modified National Insurance Scheme), which were not being utilized by farmers due to multiple inherent deficiencies.
PMFBY will be implemented from the coming Kharif (Monsoon) season. The premium rate for Kharif crops is 2% and for Rabi (Winter) Crops will be 1.5%. Commercial and horticultural crops will attract 5% premium.
Unlike previous schemes, where Premium could be as high as 15% and assured amount was capped, PMFBY is a boon for farmers not only because premium is very low but also because it mandates use of newer technology like Satellites and smart phones to make a more complete and accurate assessment of the loss of crop in shorter period.
Beyond 2% and 1.5% premium rates for Kharif and Rabi crops respectively, the balance of the Insurance premium will be paid by Central Government and State Governments on 50:50 basis.
Currently, only 23% of crops are insured. This is likely to go up significantly. Government’s goal is 50% in 3 years, but I suspect its acceptance among farmers will grow very quickly and it will reach much higher level soon.
Financial liability for the Govt for the current 23% crop coverage is Rs 31,000 crores. It will go up to Rs 57,000 crores when the crop coverage is 30%. At 50% crop coverage, this liability will Rs 88,000 crores.
India is predominantly an agricultural country, with about 60% of its people depending on agriculture for their living and income. Except for a few farmers, most of the people involved in farm-based activities have low and unpredictable income. Crop failure leads to destitution and precarious situation. Crops fail due to natural disasters including hail storms, excessive rains or droughts. They don’t seem to have a way out with failure of crops after they have invested in seeds, irrigation, insecticide and labour, and have hardly anything as a way of savings. The desperation and destitution end up forcing many farmers to commit suicide. It is reported that 3000 farmers in India have committed suicide over the last 3 years. Failure of crops affect them in multiple ways.
PMFBY is really a Life-saving scheme (Amrit Yojna) as stated by Agriculture Minister, Mr Radha Mohan Singh. It is indeed a historic scheme for farmers, as described by Home Minister, Mr Raj Nath Singh. I have no doubt that PMFBY will prove to be a boon for farmers.
It is crucial that PMFBY has mechanisms to assess the loss of crops promptly to allow the payments to the farmers within 2-4 weeks, instead of several months which has been the case with NAIS/MNAIS.
PMFBY should be reviewed annually and deficiencies thus detected should be rectified quickly. Like the Uttar Pradesh Government’s scheme of Rs 5 Lacs insurance money for farmers if they die an unnatural death, PMFBY too should have some provision of this nature.
I come from a farmer’s family in a village in Bundelkhand part of Uttar Pradesh, which is notorious for unpredictable rains, droughts and farmers’ suicides. It has been reported that approx. 400 farmers have committed suicide there over the last 12 months. I was in the region just a few days ago. Things were not looking good there this year too, after crops’ failure over the last 2 years. There is an ongoing drought there this year too.
Farmers everywhere generally, but Bundelkhan especially, will need significant support this year, before the PMFBY comes into the picture from Kharif season after August 2016. Needless to point out that crops will not be ready until December 2016. Farmers will need support for seeds, cultivation and insecticide etc this year.
I hope that Prime Minister, Mr Narendra Modi and State Chief Ministers, especially Uttar Pradesh Chief Minister, Mr Akhilesh Yadav, in case of Bundelkhand, will look after the farmers in the most compassionate way.
Farmers are our people too, and deserve to get full support for the sake of their and their families lives, health and well being.
Note: A revised copy of this post was published in a US-based opinion site http://www.myind.net
Dr Yadu Singh/Sydney/22nd Jan, 2016