Two years ago, Satbir Singh took a crop loan ahead of the sowing season for wheat as he normally did earlier also. But after having borrowed Rs 2 lakh, this 10-acre farmer from Dadupurl village in Nilokheri tehsil of Karnal discovered a sum of Rs 3,740 added to his repayment liability — as premium for so-called crop insurance.

The Haryana government, then, was implementing a national agricultural insurance scheme that made buying of insurance compulsory for farmers taking crop loans from banks. Satbir was told that if his crop was destroyed, he would be entitled for compensation covering 40 per cent of his input cost.

That very year, the crop on two acres of his land suffered damage from inclement weather. Yet, Satbir’s claim wasn’t honoured.

This year, too, his wheat crop has been partially damaged, thanks to the untimely rains and hailstorms across the country’s north-west grain bowl. But there is a minor consolation, as he would not have the premium added on to his loan repayment this reason. For that, Satbir is thankful to the Haryana government, which did not “notify” the Centre’s insurance scheme for 2014-15.

“The insurance premium was an additional burden for us. When we don’t receive anything when our crops are damaged, why opt at all for insurance?” he asks.

Haryana’s agriculture minister, OP Dhankar recently declared that his government would very soon set up an exclusive Crop Insurance Corporation on public private partnership mode with the aim of covering all farmers in the state suffering crop damage due to adverse weather events.

But going by the experience of farmers with crop insurance so far, it may not have many takers. Satbir’s is a text book case of why farmers aren’t particularly keen on crop insurance. The claims are calculated on the basis of formulae that even banks and insurance companies would admit to be flawed.

Of 16.7 lakh farming families in Haryana as per the 2011 Census, only 2.14 lakh farmers were covered by the Modified National Agriculture Insurance Scheme (MNAIS) upto Kharif 2013, the last crop season for which it was notified by the Haryana government notified the scheme.

Under the scheme, the concerned insurance company, on receiving claims from individual farmers, conducted four crop cutting experiments through random sampling in their entire villages to estimate yields and assess losses. The processing of claims happened only when the entire village was seen to have suffered crop damage.

“It is not possible for the crop in an entire village to be uniformly destroyed. The fields of some farmers would have suffered more damage than those of others. This system of calculation was itself unfair”, notes Sewa Singh Arya, president of the Haryana unit of Bharatiya Kisan Union (BKU).

But even this was an improvement. When the scheme was started in its original “unmodified” form in 2008-09, the unit for computing yield losses was at the block (tehsil) or sub-district level. It was subsequently brought down to a “cluster of villages”, before eventually coming down to the individual village level.

“Insurance has meaning only if damage is assessed for every acre. If a farmer has 10 acres and 2 acres of crop has got destroyed, he should be entitled to compensation for even that. Moreover, a 40 per cent pay-out against input costs is inadequate for a farmer who has lost everything, as has been the case this time”, adds Arya. According to Dhanpat Singh, Additional Chief Secretary (Agriculture) of the Haryana government, farmers resist insurance because they think it is a waste of money.

“They are not yet willing to accept the logic of having to pay premium if there is no crop damage. Though the premium itself is not much, farmers feel that way,” he admits.

Pawan Kumar, a farmer near Karnal, complains of having been forced to take insurance while availing of a crop loan. “I had a tiff with the insurance agency officials and managed to escape paying the premium,” he claims. There are other problems as well. The previous Congress government under Bhupinder Singh Hooda had roped in as many as 11 insurance companies to provide crop insurance across Haryana.

“Under the terms, the insurance companies were supposed to install 10 observatories across the state for monitoring temperatures and other weather-related parameters. However, they did not do so because the state government had not cleared their pending dues towards premiums”, said Dhanpat Singh.

Source - http://indianexpress.com/