Agroinsurance

NEWS

India - Crop insurance needs premium cuts

01.03.2016 390 views

Farmers and experts in India's food bowl states Punjab and Haryana are taking the crop insurance scheme announced by Union finance minister Arun Jaitley with a pinch of salt. Even though experts said the major takeaway in the Budget for the farmers in both the states would be the insurance scheme, they suggested that the premium for crops should be reduced. Jaitley has allocated Rs 5,500 crore under Pradhan Mantri Fasal Bima Yojna (PMFBY) to compensate farmers for their losses suffered on account of crop damage. Experts said the premium should be cut from current 1.5% for rabi (winter sown) crops and 2% for kharif (summer sown) crops of the sum insured (SI) or actuarial rate (whichever is less) to attract more farmers to join PMFBY. For commercial and horticultural crops, the premium is 5% of SI or actuarial rate. Farmer groups and even Punjab government had demanded changes in the modified crop insurance scheme unveiled earlier this year. Farmers of both Punjab and Haryana had grappled with huge crop losses in 2015 due to erratic weather and pest attack. In February and March 2015, unseasonal rains accompanied by hailstorm and strong velocity winds flattened wheat crop in many parts of both states. Many farmers in Haryana had committed suicides due to losses suffered on account of damage to wheat crop. In July and August last year, there was an attack of whitefly on cotton crop in Haryana and Punjab. In Punjab, the pest attack was severe affecting the fibre crop in all parts of the cotton belt in Malwa region.

According to an estimate, two-thirds of the 4.5 lakh hectares under cotton crop in Punjab was affected by the pest.

Noted agri-economist P S Rangi, who is a marketing consultant with Punjab State Farmers Commission (PSFC), said the crop insurance scheme needs more modifications to be a success. "Many farmer associations had objected to PMFBY when it was announced. Their concerns needed to be addressed, including lowering of the premium rates, so that a large number of farmers can avail of the insurance scheme. It has to be attractive for the growers. Some changes are needed to take the crop insurance scheme to India's farming community at large," he said.

Shivcharn Singh Brar, a farmer activist from Phullawala village of Muktsar district, said the response to the crop insurance scheme was not encouraging so far. "The premium has to come down. The state government has to pitch in to pay the premium since farmers don't have the capacity to do that. So many taxes are collected by the Punjab government through its agricultural marketing board, including rural development fund and infrastructure cess. This amount should be used to pay the premium for the crop insurance for the farmers," he said. Captain Amarjit Singh Bhattal, who is into organic farming at Bhanohar village in Ludhiana, said, "How do you calculate the loss for crops? Since I am a vegetable grower and also into mixed cultivation, I needed to know what sum I will get if whole of crop is damaged. Details of the scheme need to be simplified for smaller farmers like us so that we can avail crop insurance."

Source - timesofindia.indiatimes.com

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