Crop insurance claims under the Pradhan Mantri Fasal Bima Yojana (PMFBY)

In News –Rejected claims of farmers crop insurance multiplied 10 times in two years under the Centre’s flagship Pradhan Mantri Fasal Bima Yojana (PMFBY).

• Insurance companies can reject some of the claims on various grounds like the late intimation of claims, denial of claims to non-insured farmers or non-insured crops, non-occurrence of the risk etc.

Data Analysis

• In 2017-18, the number of rejected claims was 92,869.
•  In the next year, 2018-19, the figure more than doubled to 2.04 lakh.
  • By 2019-20, it was 9.28 lakh, a 900% increase.

About  Pradhan Mantri Fasal Bima Yojana (PMFBY)

• The flagship crop insurance scheme was launched on 13th January 2016, in line with the One Nation-One Scheme theme, covering over 5.5 crore farmer applications year on year.
• It replaced the existing National Agricultural Insurance Scheme (NAIS) and its modified version (MNAIS).
• As an end-to-end risk mitigation mechanism, it extends coverage for the entire cropping cycle from pre-sowing to post-harvest.

Provisions :

• There is no upper limit on Government subsidy.
•  The premium rates to be paid by farmers are very low, and the Government pays a balance premium to provide full insured amount to the farmers.
• The prescribed premium is 2% to be paid by farmers for all Kharif crops and 1.5% for all rabi crops.
• In the case of annual commercial and horticultural crops, the premium is 5%.
• Premium cost over and above the farmer share is equally subsidised by States and the Center.
• However, the Centre’s share is 90% of the premium subsidy for the Northeastern States to promote the uptake in the region.
• Earlier, there was a provision of capping the premium rate, which resulted in low claims being paid to farmers, so it was removed and farmers will get a claim against full sum insured without any reduction.

Use of Technology in Yojna:

• Integration of land records with the PMFBY portal.
• Crop Insurance mobile app for easy enrolment of farmers.
• Farmers can report crop loss within 72 hours of the occurrence of any event through the App, Common Service Centres (CSCs) or the nearest agriculture officer.
• Usage of satellite imagery, remote-sensing technology, drones, artificial intelligence (AI) and machine learning (ML) to assess crop losses.

Farmers to be covered

• All farmers growing notified crops in a notified area during the season who have an insurable interest in the crop are eligible.
• To address the demand of farmers, the scheme has been made voluntary for all farmers from Kharif 2020.
• Earlier to Kharif 2020, the enrollment under the scheme was compulsory for following categories of farmers:
  • Farmers in the notified area who possess a Crop Loan account/KCC account (called as Loanee Farmers) to whom credit limit is sanctioned/renewed for the notified crop during the crop season.
  • Such other farmers whom the Government may decide to include from time to time.
• Voluntary coverage: Voluntary coverage may be obtained by all farmers not covered above, including Crop KCC/Crop Loan Account holders whose credit limit is not renewed.

Objectives:

• To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests and diseases.
• It covers yield losses, losses arising out of prevented sowing due to adverse weather conditions, post-harvest losses and losses due to certain localized problems like hailstorms, landslides and flooding.
• To stabilise the income of farmers to ensure their continuance in farming.
• To encourage farmers to adopt innovative and modern agricultural practices.
• To ensure the flow of credit to the agriculture sector.

Revamped PMFBY (PMFBY 2.0)

• Under the revamped PMFBY, the scheme is made voluntary for all farmers.
• The states have also been provided flexibility to rationalise the sum insured so that adequate benefit can be availed by farmers.
• The average sum insured per hectare has increased from Rs. 15,100 during the pre-PMFBY schemes to Rs. 40,700 under PMFBY.
• The allocation of work to insurance companies in a cluster has been set at three years for ensuring proper infrastructure creation, including setting up of stratified grievance redressal mechanism.

Achievements

• Claims worth Rs. 90,000 crore have so far been disbursed to farmers since the launch of the scheme.
• The Aadhaar seeding has helped in speedy claim settlement directly into the farmer accounts.
• Even during the Covid-19 lockdown period, nearly 70 lakh farmers benefitted and claims worth Rs. 8,741.30 crore were transferred.
•  Some notable examples:
  • Prevented sowing claims over Rs 500 crore in Andhra Pradesh and Karnataka during the Kharif 2019 dry spell.
  • Localised calamity claims of over Rs 100 crore in Haryana during Kharif 2018 hailstorm.
  • Unseasonal rainfall claims to the tune of Rs 5,000 crore in Maharashtra during the Kharif 2019.
  • Mid-season adversity claims of nearly Rs. 30 crores in Rajasthan during rabi 2019-20 locust attack.

Source: TH