Are you Ready for Insta 75 Days Revision Plan (UPSC Prelims - 2020)?
- Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.
- Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.
Pradhan Mantri Fasal Bima Yojana (PMFBY)
What to study?
- For Prelims: PMFBY- key features.
- For Mains: PMFBY performance analysis, shortcomings and ways to address them.
Context: Parliament’s committee on estimates has in its latest report called for re-formulation of the Pradhan Mantri Fasal Bima Yojana (PMFBY), seeking transparency in its working and asking for more financial allocations to attract increasing participation from farmers. The committee has observed that there are fundamental flaws in the design of the scheme that renders it rather ineffective.
Pradhan Mantri Fasal Bima Yojana (PMFBY), the flagship programme launched with much fanfare in 2016, has run into rough weather. With both the area covered and the number of enrolled farmers declining, the country’s premium crop insurance scheme is certainly in need of an overhaul.
Challenges at present:
Insufficient reach and the issue of penetration.
Data constraints: With just around 45% of the claims made by farmers over the last three crop seasons data for the last rabi season is not available paid by the insurance companies.
Low payout of claims: The reason for the very low payout of claims is that only few state governments are paying their share of the premiums on time and till they do, the central government doesn’t pay its share either. Till they get the premium, insurance companies simply sit on the claims.
Gaps in assessment of crop loss: There is hardly any use of modern technology in assessing crop damages. There is lack of trained outsourced agencies, scope of corruption during implementation and the non-utilisation of technologies like smart phones and drones to improve reliability of such sampling
Less number of notified crops than can avail insurance, Inadequate and delayed claim payment.
High actuarial premium rates: Insurance companies charged high actuarial premium rates.
If states delay notifications, or payment of premiums, or crop cutting data, companies cannot pay compensation to the farmers in time.
Poor capacity to deliver: There has been no concerted effort by the state government and insurance companies to build awareness of farmers on PMFBY. Insurance companies have failed to set-up infrastructure for proper Implementation of PMFBY.
PMBY is not beneficial for farmers in vulnerable regions as factors like low indemnity levels, low threshold yields, low sum insured and default on loans make it a poor scheme to safeguard against extreme weather events.
In April, 2016, the government of India had launched Pradhan Mantri Fasal Bima Yojana (PMFBY) after rolling back the earlier insurance schemes viz. National Agriculture Insurance Scheme (NAIS), Weather-based Crop Insurance scheme and Modified National Agricultural Insurance Scheme (MNAIS).
Premium: It envisages a uniform premium of only 2% to be paid by farmers for Kharif crops, and 1.5% for Rabi crops. The premium for annual commercial and horticultural crops will be 5%.
The scheme is mandatory for farmers who have taken institutional loans from banks. It’s optional for farmers who have not taken institutional credit.
- Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events.
- Stabilizing the income of farmers to ensure their continuance in farming.
- Encouraging farmers to adopt innovative and modern agricultural practices.
- Ensuring flow of credit to the agriculture sector which contributes to food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from production risks.
Sources: the hindu.
Mains Question : Examine the issues in Pradhan Mantri Fasal Bima Yojana and discuss ways through which the coverage under this scheme can be enhanced?(250 words)