Telangana: Insurance companies gain from 'Pradhan Mantri Fasal Bhima Yojana'

Hyderabad: Pradhan Mantri Fasal Bhima Yojana (PMFBY), the crop insurance scheme introduced by the Centre in 2016, has benefited private insurance companies more than it has benefitted farmers.

In Telangana, farmers, the Centre, and the State Governments all put together paid a premium of Rs 166 crore to insurance firms in 2016-17; while the total compensation awarded to farmers was only  Rs 97 crore. Most insurance claims were rejected under some pretext or the other.

A Weather-Based Crop Insurance Scheme (WBCI), was also launched last year, through which farmers received Rs 63 crore in compensation against the Rs 64 crore paid in the form of premiums. Farmers suffered massive losses due to drought conditions in June and July and unseasonal rains in September last year.

Nearly 6 lakh farmers paid Rs 230 crore in all, in the form of premiums to subscribe to the PMFBY and WBCI Schemes. Of this amount, the Centre and the State Government collectively contributed Rs 144 crore.

According to sources, over 5 lakh farmers submitted insurance claims amounting to Rs 250 crore. But insurance companies approved the claims of only 1.95 lakh farmers, which amounted to Rs 160 crore. 

Pocharam Srinivas Reddy, the Agriculture Minister, said, “We have conducted a thorough study to find out how the PMFBY and WBCI schemes benefitted farmers. These schemes were introduced last year and the findings are important to assess their actual impact. Ironically, it has been found that the insurance firms are benefitted, rather than the farmers. Farmers could not even recover the premium amount.”

It seems the insurance firms only approved meagre claims. The compensation amount is expected to be credited into the bank accounts of farmers within the next two months.

Insurance firms had set June 15 as the deadline for payment of premiums for the insurance of cotton crops. However, only a fraction of the farmers had sown their cotton crops by then, due to inadequate rainfall.

Since a large number of farmers have opted for the cultivation of cotton this year, the State Government has extended the deadline for payment of premiums to July 31, in order to bring more farmers under the insurance cover. However, the Centre has yet to approve this extension.

Agriculture Minister said that it was necessary for the deadlines for premium payment to be extended so that farmers could benefit from it. 

“It is not fair to set deadlines in June because agricultural activity is limited until then,” he said.