Several states, including Punjab which is dubbed the "bread basket of India", are still holding out on implementing the government-backed farm insurance scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY).
Thus far, Punjab, Sikkim, Manipur and Nagaland have not implemented the PMFBY, while it is operational or will be soon in Gujarat, Uttar Pradesh, Chhattisgarh, Andhra Pradesh, West Bengal, Maharashtra, Odisha, Jharkhand, Tamil Nadu, Himachal Pradesh, Uttarakhand and Assam, reported The Tribune. There are 29 states and seven union territories in the country.
Farmers of Punjab say they had no say in the formulation of the PMFBY, which was introduced last year.
The major flaw in the scheme is that it comes into play only if there is 40% crop damage in a village, which is counted as a single unit in the provision of any relief, says Mr BS Rajewal of the Bharatiya Kisan Union (BKU), a farmers' representative organisation.
Firstly, farmers want the scheme, instead of being village-specific, to be farm plot-specific, with compensation levels above 95%.
Secondly, farmers demand that the 10-year benchmark for assessing ‘normal’ yield levels while deciding on the insurance premium be scrapped, and the latest yield should be taken into account.
The premium should also be standardised to 1% for farmers in Punjab for all crops, as crop losses in Punjab are very low as compared to the rest of the country. The PMFBY charges farmers 2% of the insured value for kharif (monsoon) crops, 1.5% for rabi (winter) crops and 5% for annual commercial crops including horticulture crops. The rest of the premiums are paid by the government, divided equally between the Centre and state governments.
Thirdly, the crop lying in market yards should also be covered. At present, only the harvested crop in the fields lies within the ambit of the scheme. Largely mechanised harvesting operations and relatively easy access to markets in Punjab ensure that the crop reaches rural markets within hours. Hence, it needs protection from the vagaries of weather, where it may await procurement for days.
The main reason why Punjab farmers generally do not buy crop insurance is the fact that crop losses are very low in the state, amounting to below 10%.
The central government has said that it had asked state governments to set up their own insurance companies for better implementation of the crop insurance scheme.