Weak response to crop insurance schemes despite increasing risks to crops from climate change

- The changing weather conditions are becoming a major challenge to the agriculture sector of the country

While on one hand climate change is affecting the country's agriculture sector and crops are being damaged or production is falling, on the other hand the important Pradhan Mantri Crop Insurance Scheme to provide security to farmers by compensating them is weakening day by day. . Due to high temperature, wheat yield was affected this year, due to which the government was forced to impose regulations on wheat exports. Production of the current year's kharif season is estimated to be moderately low due to uneven rainfall. In the current sugar season of 2022-23, which started from October 1, domestic sugar production is reported to be seven percent lower. Lower sugarcane production is expected to result in lower sugar production. Unfavorable weather has affected sugarcane production in Maharashtra. Thus, when adverse weather conditions are affecting the production of various crops, states are withdrawing from crop insurance schemes for farmers.

The Prime Minister is withdrawing from the Fasal Bima Yojana as some states are unable to pay their share of insurance premium subsidy due to financial stress, said a statement issued by the Center recently. The Center has also expressed its willingness to make pro-farmer changes in the scheme due to the climate crisis. It rejoined the insurance scheme in July this year after the Andhra Pradesh issue was resolved, but several other states are still outside the scheme.

Several states, after initially joining the Pradhan Mantri Crop Insurance Scheme, have withdrawn from it for one reason or another in the last few years. According to the current year's Kharif data, only 19 states of the country have taken advantage of this insurance scheme, which was 22 states in 2018. The number of farmers getting insurance cover has also decreased from 2.16 crore in the kharif season of 2018 to 1.53 crore in the current year's kharif season. According to the Pradhan Mantri Fasal Bima Yojana website, the number of states has reduced to 14 in the current Rabi season. Under this scheme, Center and State have to pay equal share in the premium for insurance cover. In the last 6 years, insurance companies have paid approximately Rs 1.25 trillion as compensation to farmers against the premium payment of approximately Rs 25186 crore for crop damage.

Under the scheme, farmers have to pay a maximum of two percent of the sum insured as premium for kharif crops, while 1.50 percent for ravi crops. The rest of the premium is paid by the Center and the concerned state. Three years after the implementation of the scheme, in 2020, the government has made the scheme optional for farmers who have already received loans. Not only that, some changes have also been made to make it attractive for farmers.

Crop insurance scheme was introduced in the country for the first time in 1972 and many schemes have been introduced since then, but hardly any of them have attracted the farmers. Pradhan Mantri Crop Insurance Scheme is also not excluded from this. One of the reasons behind the failure of crop insurance schemes is the lack of faith of the farmers in the schemes. Due to this lack, farmers hesitate to take insurance cover as hedging to protect against crop loss. The number of cultivated area covered under the insurance cover is around 550 lakh hectares every year while the Kharif sowing area and Ravi sowing area in the country is much more than this. Kharif sowing covers an area of ​​1000 lakh hectares while ravi sowing covers an area of ​​650 lakh hectares.

In the beginning of the Pradhan Mantri Fasal Bima Yojana many insurance companies joined the scheme in view of the huge subsidy from the government but later they are seen to have left. Companies do not consider agricultural insurance business to be commercially sustainable, believing that such schemes are more politically motivated than protecting farmers. Insurance companies are also finding it difficult to obtain reinsurance for agricultural insurance. The current Pradhan Mantri Crop Bima Yojana has become the most criticized than the earlier announced Crop Bima Yojana. It has been very difficult for the Center to implement the scheme in view of the different geographical position of each state in the country, unpredictable weather conditions and the resulting variability in crops. To cool down the criticisms, the government is also making frequent changes in the Sadar scheme. However, the number of farmers is not increasing.

During the Corona period, when various sectors of the country were under stress, the agricultural sector showed the best performance and saved the country's economic growth rate from collapsing. Keeping in view the fact that only the government can provide support to the farmers who depend on nature, measures to make the crop insurance scheme attractive besides provisions to involve more and more farmers have become the need of the hour. The impact of climate change is also being seen on the agriculture sector of the country, if any claim under the Pradhan Mantri Fasal Bima Yojana is settled on time to provide protection to the farmers against this change in weather, it will help the farmers to increase their attractiveness for the scheme along with the relief.