Continuous increase in the rate of premiums under the Minister's Crop Insurance Scheme following the changing policies

New delhi date. September 25, 2019, Wednesday

Under the Minister's Crop Insurance Scheme, insurance companies are raising premiums every year. Insurance companies are blaming the government's ever-changing policies for raising rates. Due to the increase in the rate of premiums, both the government and the farmer are forced to pay more money.

In the year of 2-3 years, the premium rate was 5.2% of the sum insured, which increased to 5% in 5-7 and 5% in 1-3. For the current year, the rate for kharif crops has increased and the rate for the whole year is 8%.

The total area under cultivation covered under this scheme has increased marginally while the amount of premium has gone up considerably. Insurers were paid Rs 5.5 crore in premiums to insurance companies, which increased to Rs 5 crore by 3-5.

Generally, a large portion of the premiums are paid by the government, but the increase in them every year is also increasing the burden on the farmers, government sources said.

As per the guidelines of the Minister's Crop Insurance Scheme, a farmer has to pay two per cent of the sum insured for kharif crops and one and half per cent of the sum insured for rabi crops, the remaining amount is to be shared equally by the central and state government.

On the one hand, farmers are paying more for premiums, while on the other side, farmers are facing challenges in obtaining damages claim which farmers are not particularly keen to cover.

Insurance companies are claiming that premium rates are being forced to increase due to frequent changes in government guidelines under the insurance plan. It is also alleged that malpractices are being used by the states in the production of crops to get more of the claim amount. In addition, due to changes in crop yield calculations, insurance companies have started claiming money.