The Centre may remove insurance companies from the subsidised crop insurance scheme — PM Fasal Bima Yojana (PMFBY) — in the next few years and assign the job to State governments after the infusion of technologies in crop-cutting and satellite monitoring of sowing, harvesting starts showing results.
“Though it is too early to say definitively that insurance companies will be driven away, of late there is a demand from the States who have started questioning the role of insurance companies in PMFBY. So, in the next phase, the States may be given option to carry out PMFBY themselves by taking the responsibility,” an official source said.
Already Andhra Pradesh, Maharashtra and Odisha are implementing universal coverage — covering all land-owning farmers — by paying even the farmers’ share of premium (either completely or charging a token ₹1 to farmers) under PMFBY, sources said. Many other States are also considering universalisation of crop insurance, the sources said. Bihar, West Bengal and Gujarat too have their own crop insurance schemes that cover all the farmers.
Last week, Agriculture Secretary Devesh Chaturvedi had told a conference that with the launch of Yes Tech, a tool developed to avoid manual intervention in the crop-cutting experiments and to assess crop yields, the crop damage will be accurately estimated and according farmers will be duly compensated.
Credibility issues
Pointing out that many people question the credibility of manual crop-cutting experiments, which is the basis on which current crop losses are arrived and claims are approved, Chaturvedi said that with the infusion of technologies, such doubts will be removed.
“There are talks of universalisation of crop insurance. Currently, we cannot implement universalisation even though we want. If the assessment of crops (productivity) becomes accurate by using space technologies, a digital crop survey will tell everything – who is the farmer, what is his contact number, what is his Aadhaar identity, what crops has he grown. Even the real-time crop conditions of the entire village will be known. In reality, there will be no need for insurance companies in PMFBY,” he said.
He is hopeful of transformational changes in agriculture through infusion of satellite technologies. Under PMFBY, farmers pay 2 per cent of the sum insured as premium in kharif season and 1.5 per cent in rabi and 5 per cent for cash crops in both seasons. The remaining premium amount, derived after tender for different crops in different clusters, is shared at 50:50 ratio by Centre and States. The sharing of subsidised premium formula is 90:10 for the North-Eastern and hilly States.
Official sources said that States are ready to take up PMFBY as a scheme as there will not be any loss as seen from the operations of insurance companies in last 6-7 years. “If the claim amount is more than the premium in one year, the claim to premium ratio will be even-out over a five-year period as claims are normally below gross premium,” the source quoted earlier said.