- 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: Out of ₹1,400 crore earmarked annually for the north-eastern States under the Centre’s flagship Pradhan Mantri Fasal Bima Yojana, only ₹8 crore — or just over half a per cent — was actually spent last year, according to the Agriculture Ministry. Four north-eastern States — Arunachal Pradesh, Nagaland, Manipur and Mizoram — are not covered under the scheme at all.
Issues with the implementation of the scheme:
- Farmers in seven States and four Union Territories nationwide will not be covered by the scheme in this kharif or summer season, for which sowing begins next month.
- Some large States like Bihar and West Bengal have withdrawn from PMFBY to set up their own State-level schemes and Punjab has never participated in the scheme, while UTs like Delhi and Chandigarh are largely urban spaces.
- However, States in the Northeast, as well as the Union Territory of Daman and Diu, face challenges such as the lack of interest by insurance companies and the lack of State budgetary resources to pay their share of the premium.
- This lack of coverage has left thousands of maize farmers devastated by losses from the fall armyworm pest there without any hope of insurance.
- Insurance companies have been reluctant to bid for these States, as the administrative costs are high. There are no proper land records. Historic yield data is not available for these States, particularly at the gram panchayat and block level.
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.