States exiting PM Fasal Bima Yojana due to Centre’s apathy: Expert

This observation was made by Prof. R. Ram Kumar, school of development studies, Tata Institute of Development Studies, Mumbai, at a symposium on ‘Adverse Climate Change and Condition of Farmers’.

Addressing the meeting on the 10 anniversary of ‘chaitanya sedyam’ the magazine of AIKS (All India Kisan Sabha), he said, “Centre’s contribution to PMFBY is either stagnant or falling at times. The ratio of expenditure is 50:50. The share of states was `7,400 crore when the scheme was started, which has now risen to `10,700 crore. However, the premium paid by the Centre only rose from `7,100 crore to `8,200 crore in the kharif season. The claims, however, fell from `14,800 crore in 2018 to `10,400 crore in 2023.”

Further pooh-poohing the assertion of the government that the fall in claims was due to reduction in extreme events, citing Andhra Pradesh, he said that the number of heat wave days were eight in 2018, 14 in 2019 and 15 in 2023. Extreme flood events in AP were five in 2021, four in 2021-22 and four in 2022. The payments by AP government as compensation increased from `1,475 crore in 2019 to `2,100 crore this year.

Dwelling on the insurance coverage under PM Fasal Bima he said, “Of the 12 crore farmers who receive `6,000 under PM Kisan Samman Nidhi only 2.17 crore farmers were covered in the 2018 kharif season, which nosedived to 1.9 crore farmers in 2022 kharif. As a consequence, Andhra Pradesh, Jharkhand, Gujarat, West Bengal and Telangana left the scheme. We are yet to come up with a comprehensive crop insurance scheme. Farmers also need mitigation measures like a price stabilisation fund to cushion them from price fall.”

PMFBY covers only the loanee farmers from banks. The government did not exempt them from premium payment despite recommendation for making it a voluntary one. The method of calculating threshold yield to settle claims by looking at weighted averages of yield over the last seven years excluding up to two calamity years is against the interests of farmers, who practice agriculture in semi-arid and dry regions.

The states are unable to pay their premium on time and are being penalized for it. The states are hence going for their own schemes and exiting PM Fasal Bima Yojana.

The PMFBY leaves the agriculture sector to private corporates. The companies pay only 20 to 30 per cent of what they collect as claims. The Centre should stop marketing it as its scheme, he said.