Crop insurance falls short of promise

Appala Venkatesh is a farmer owning and farming in 1.25 acres of his land in Laxmapur village of Telangana. By mid-June, he was ready with his nursery for paddy, expecting monsoon to hit by mid-uly. Ideally, Venkatesh should have transplanted from the nursery to the regular field in a month.

Considering the dry spells, he postponed the sowing by 15 more days. Finally, about 50 per cent of the nursery was transplanted as he could not afford to waste the entire season. He took a leap of faith that there would be rains and that his modest borewell would pump some water as he knew that he was running out of time.

India Meteorological Department released a forecast of normal rainfall across the country during the current monsoons. Unfortunately, as we talk, monsoons in central India and South India are deficient by 2 per cent and 18 per cent, respectively.

This breaks up into a deficit of minus 22 per cent for West Madhya Pradesh, minus 23 per cent for East Madhya Pradesh, minus 32 per cent for Vidarbha and minus 31 per cent for Marathwada. Similarly, the rainfall deficit so far in South Interior Karnataka, Coastal Karnataka and Kerala is 29-30 per cent.

Telangana too is experiencing a bad monsoon as 80 per cent of the districts in Telangana experienced a shortfall in rain. More than a two crore farmers such as Appala Venkatesh in areas of bad monsoon must be considering alternatives like resowing, as there is bad germination, or changing the very crop.

But the truth is that such farmers lost money invested and also now stare at a frightening one year ahead of them. If kharif goes bad, rabi could be worse.

Recently, a research by Tamma Carleton, a doctoral fellow at University of California, Berkeley, US, claims that climate change has already caused more than 59,000 suicides in India over the last 30 years.

These disturbing numbers are not difficult to relate to, given the poor preparedness that we as a country have for climate change. With agriculture remaining a gamble on the monsoons, there is all the more reason to focus on climate-resilient farming and its implementational aspects. Farmers pay a higher price for climate change than what anyone else probably would.

The Government believes that the issues of farmers are addressed by one of the pet projects of the prime minister on weather linked crop insurance, the Pradhan Mantri Fasal Bima Yojana (PMFBY). But what is the reality?

When the monsoon did not hit many parts of the country this time, as of mid July, this insurance should have come to the rescue of farmers. They had begun experiencing losses, given erosion of their investment in the kharif crop. This did not happen.

Any insurance policy comes into force upon payment of insurance premium and when a policy is issued. In a study conducted by Centre for Science and Environment (CSE), in the case of weather linked crop insurance, this work is entrusted to bankers extending crop loans as most of the farmers do avail these loans.

Surprisingly, some bankers in Madhya Pradesh reported that the premia will be deducted after August 15. Essentially, the loss would have already been incurred by then. Further, a few governments like Maharashtra released delayed notifications asking farmers to postpone the date of sowings, which seemed like a way to avoid the future blame.

There are three main problems underlying this failure of PMFBY. First, weather linked insurance presupposes availability of reliable metereological data. While the overall forecast precision seems to have improved in the past five years, the real problem remains one of reliable data of being obtained village-wise.

Second, even when the percentage of rainfall estimated is achieved, delays in timing of rains compared to forecasts and the problem of more rain per day are not yet considered into the suggestions given to farmers.

The second problem is lack of farmer awareness about the process of crop insurance. The buyer of the policy should know enough about it. This is not the case with Indian farmers.

Third, there should be a robust implementation mechanism, which is non-existent. In many cases, the government’s share of premium payment to the insurance companies has been delayed. Like many other populist schemes, the focus of the government is on claiming the reach of PMFBY to more regions than its real impact on farmers.

According to reports, for 2016-17, only 45 per cent of the claims for crop losses have been settled. Most claims are reported to have remained unpaid in Bihar, Goa, Gujarat, Tamil Nadu, Rajasthan, Telangana, Orissa, Manipur and in a few other States.

Research carried out by a non-profit Centre for Science and Environment (CSE) says insurance companies, particularly the private ones, lack necessary human resources and rural infrastructure to deliver the scheme.

Ideally, the government should encourage more research in building climate smart farming solutions for small farmers like affordable greenhouses, low tunnels and the like to create more reliable income earning opportunity for small farmers. These are preventive measures.

In our work at Kheyti with small farmers, we are experiencing the need and the urgency perceived by farmers to have such reliable income generating asset.

This is more of a permanent and a pro-active solution. These take time to reach millions, but surely should reach every farmer like Appala Venkatesh one day.

But today, when we are largely monsoon dependent agrarian economy, we need a robust weather linked crop insurance mechanism. PMFBY is a great idea. As Dwight D Eisenhower said, “Plans are nothing. Planning is everything.” If we may add to it, ‘implementation of the plans is the most important thing’.