By Ananya Banerjee, WBNUJS, Kolkata.
The National Crime Records Bureau, in its report for accidental deaths and suicides, stated that a total of 5,650 farmers have committed suicide in the year 2014. The highest incidents of 2,568 farmers’ suicide were recorded in Maharashtra, followed by 898 incidents in Telangana and 826 in Madhya Pradesh during 2014. The report also mentioned the main reasons behind such suicides in which, ‘Bankruptcy and indebtedness’ topped the chart. According to a report published in September 2015, due to less than 50 percent rain in 2015 monsoon, more than 600 farmers have already committed suicide in the drought-prone Marathwada region of Maharashtra till now.
Need for Protection
The farmers are the true pillars of the country. It is them who grow the crops that we need for survival. Although the Government, since independence, is trying every way possible to incentivize the farming sector of India, the efforts have been proven to be inadequate so far due to mainly one reason – the farming sector is highly dependent on the bulk of rainfall. In case of drought or flood, while everyone suffers, a farmer suffers the most. Untimely fog or rain, pest and disease attack – all of these result in severe loss of crops. With the drastic change in the world climate due to global warming, Indian farmers are facing the toughest time. They are in dire need of effective protection.
Introducing the Scheme
Prime Minister, Mr. Narendra Modi recently wrote an open letter to the farmers of our country stating that several steps have been taken to protect the farmers from the losses incurred due to natural disasters – one of which is Pradhan Mantri Fasal Bima Yojana (“Scheme”). As the name suggests, it’s a form of crop insurance which would also protect the farmers from the effect of falling market prices. “There have been insurance schemes for farmers in the past as well. However, they were unsuccessful because of various reasons – ranging from high premium rates to low claim value and non-coverage of localized crop loss. As a result, not more than 20% of farmers opted for crop insurance; and those who did, faced many difficulties to get their due. Eventually, farmer’s faith in insurance schemes eroded over time,” he correctly pointed out. The Scheme, as claimed by our Prime Minister, is expected to overcome these shortcomings and is farmer-friendly.
Salient Features of the Scheme
The main objective of the Scheme is to provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & diseases. The other objectives include stabilizing the income of farmers to ensure their continuance in farming, encouraging them to adopt modern agricultural methods and ensuring flow of credit in agricultural sector. The Scheme shall be administered by multi-agency framework under the overall guidance & control of the Department of Agriculture, Cooperation & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India and the concerned State in co-ordination with various other agencies. The existing State Level Co-ordination Committee on Crop Insurance (SLCCCI), Sub-Committee to SLCCCI, District Level Monitoring Committee (“DLMC”) already overseeing the implementation & monitoring of the ongoing crop insurance schemes shall be responsible for the management of the Scheme.
Crops and Notified Area: The Scheme covers all crops for which past yield data is available and which are grown during the notified season. Notified area, for the purpose of the Scheme, shall mean the unit of insurance decided by the State Government for notifying a crop during a season. Like all other insurance, a farmer must have insurable interest in the notified crops growing in any notified area in a notified season.
Coverage: While the loanee farmers, having a Crop Loan Account/Kisaan Credit Card Account, and such other farmers, as notified by the Government, shall be compulsorily covered under the Scheme in case of satisfying the abovementioned conditions, others may seek voluntary coverage under the Scheme.
Risks Covered: Yield losses occurred due to (i) natural disasters including attack of pests and diseases; (ii) prevention of sowing owing to weather conditions; (iii) specific perils of cyclone/cyclonic rains, unseasonal rains throughout the country, in case of post-harvest crops; and (iv) localized calamities, i.e., hailstorm, landslide, and inundation affecting isolated farms in the notified area are covered under the Scheme. However, risks and losses occurred due to war, kindred perils, nuclear risks, riots, malicious damage, theft, act of enmity, grazed and/or destroyed by domestic and/or wild animals, or losses occurred to harvested crops, kept bundled and heaped at a place before threshing, are not covered under the Scheme.
Limit of Coverage and Other Details: In case of loanee farmers falling under the compulsory coverage, the sum insured may be extended upto the value of threshold yield of the insured crop at the option of insured farmer, as decided by the DLMC. For farmers covered on voluntary basis, the sum-insured is upto the value of the threshold yield, i.e., threshold yield x (Minumum Support Price or gate price) of the insured crop. The premium rates would vary from 1.5% to 5% of the sum insured or actuarial premium rate, whichever is less. The insurance companies shall be liable to pay upto a total sum of 350% of the total premium collected or 35% of the total sum insured in a State, whichever is higher. Any losses beyond that ceiling would be equally divided between the Central Government and the concerned State Government. Three levels of indemnity would be available for risk associated to all crops. The claim payouts shall be calculated in accordance with the formula provided for that purpose and the amount shall be electronically transferred to the insured’s bank account. The Union Government shall make further rules and regulations for successful implementation of the Scheme. The Scheme document would be underwritten by the general insurance companies.
The Agriculture Minister Radha Mohan Singh has called this Scheme an ‘Amrit Yojana’. The Union Government has rightly claimed that this Scheme has the lowest premium rate among all the crop insurances. The Scheme is formulated to shield the farmers from the losses occurred to them due to reasons beyond their control. The Scheme is replacing the two existing crop insurance schemes of the country – the National Agricultural Insurance Scheme and the Modified National Agricultural Insurance Scheme. These two schemes had many shortcomings that are absent in the Scheme. Apart from fixing a low premium rate, the Scheme also provides protection against post-harvest risks, which were absent under the previous schemes. The Scheme would also promote the use of current-age technology like, use of smart phones, remote sensing etc. The Pradhan Mantri Fasal Bima Yojana, has, thus, successfully incorporated all the best features of the previous schemes and is in line with the effort of the Government to implement a single scheme for the whole country. The Scheme is a welcoming step towards protecting the farmers of the country who are the pillars of India. I hope that in near future, no farmers would need to end their lives owing to the loss of yield due to drought, flood or any other risk attached to agriculture, which is beyond their control.