Farmers Embrace Flagship Insurance Scheme in Unprecedented Numbers

Record High Participation: Farmers Embrace Flagship Farm Insurance Scheme


Farmers across the country have increasingly turned to the Modi government’s flagship farm insurance scheme, marking a significant surge for the second consecutive year. A comprehensive review conducted by the farm ministry sheds light on this upward trend, coupled with improvements across various indicators. The review, encompassing data until the Kharif or summer-sown season of 2023 (until November 2023), reveals a noteworthy 28.9% rise in the number of cultivators enrolling in the scheme, reaching a staggering 79.1 million – the highest figure recorded in six years.

Furthermore, the total area insured, a crucial metric, witnessed a robust growth of 24%, encompassing 30 million hectares, according to official statistics. Notably, premium rates for the kharif season experienced a significant decline of 32%, resulting in savings amounting to ₹10,500 crore. This reduction underscores the evolving maturity of the scheme, signalling positive strides in its implementation.

The Pradhan Mantri Fasal Bima Yojana (PMFBY) stands as the primary subsidized crop insurance scheme in the country. Under this initiative, farmers contribute premiums ranging between 1.5% and 2% based on crop cycles, with the remainder shared equally between the Centre and state governments. In northeastern states, the Centre assumes 90% of the premium subsidy.

Launched in June 2016, PMFBY replaced a complex array of multiple farm insurance schemes with a unified nationwide plan. Despite its overarching objectives, the scheme has grappled with significant inefficiencies, particularly concerning delays in disbursing insurance claims – a critical aspect for farmers. However, recent enhancements in monitoring mechanisms, revisions in operational guidelines, integration of land records, and the adoption of digital technologies have contributed to an improved scheme performance.

To expedite claim processing, the government has implemented satellite-based advanced technologies for crop damage assessment. Yet, challenges persist, with farmers expressing grievances over prolonged delays in compensation payouts, primarily due to administrative issues. In a significant overhaul of operational guidelines, the Centre now disburses its share of premiums independently, irrespective of state contributions, aiming to accelerate settlement processes.

Official data indicates a notable uptick in farmers’ applications, with a 33.4% and 41% year-on-year growth observed during 2022-23 and 2021-22, respectively. This positive trajectory follows two years of lacklustre performance characterized by farmer withdrawals in 2020 and 2021. In 2020, farmer enrollment witnessed a stark decline of 23% to 23.7 million, followed by a further 10% plunge to 16.3 million participants in 2021.

Nevertheless, outstanding dues remain a persistent concern. Data presented in Parliament last year revealed pending claims worth ₹2761.10 crore until 2021-22. According to Ravi Duggal, an independent farm expert, delayed compensation poses significant challenges for farmers, hindering their ability to cover cultivation costs for subsequent seasons.

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