Most of the farmers availing agricultural loans are not covered under the crop insurance scheme - Pradhan Mantri Fasal Bima Yojana of the union government. Though guidelines were issued for the credit providing banks to incorporate the farmers into the crop insurance scheme, many banks abstained from following this recommendation. 

The crop insurance scheme assures compensation for crop loss or poor harvest on account of any natural calamity or climate change. As many as 26 crops notified by the respective state government are covered in this insurance scheme.

It was mandatory for the banks to include the farmers cultivating any of these 26 crops into the crop insurance scheme while granting loans until April 2022. Later, the Centre revised the regulations and proposed that the banks can avoid entering farmers in the scheme, according to the beneficiary's will. The banks shall receive a consent letter from the farmers for not including them in the crop insurance scheme. Gradually the banks stopped including the farmers in the scheme even without collecting consent letters. In 2019-20, 70.27 per cent of farmers joined the scheme through the banks. However, this dropped to 32.04 per cent in 2021-22.

Farmers can avail loans based on crops under the Kisan credit card Yojana. Rs 13,721.86 crore has been distributed in the state via 8.82 lakh cards in 2020-21. Majority of the farmers who availed Kisan credit loans during this period were outside the security of crop insurance scheme.

The insurance scheme is also available for paddy as the paddy farmers in the state are under huge stress. 78.9 per cent of paddy production in the state are spread across Palakkad, Alappuzha, Thrissur, and Kottayam districts. However, most of the paddy farmers in the districts except Palakkad are not covered in the insurance scheme.

Source - https://english.mathrubhumi.com