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New Crop Insurance Scheme will go a long way in addressing farmers’ issues

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By Nirendra Dev

Agriculture being the mainstay of Indian people traditionally and culturally, it is refreshing that the Narendra Modi government has been focusing on the agriculture front quite seriously. Therefore the announcement of the New Crop Insurance scheme on 13th January, 2016 by the Government of India has received applause from all quarters.

The government and the policy makers have always faced a few challenges vis-à-vis the task of ensuring food security, higher agri growth and adequate jobs in agri sector. There has been a long felt need to bring together in one place all conceptual issues, detailed institutional framework and operational details related to farmers’ welfare, risk management of farming community and the crops during drought and floods, and other localized risk factors.

The broad policy on drought and natural disaster management prepared by the government has prescribed multifold actions vis-à-vis the disaster mitigation plans, relief measures required for providing succor to the affected population, and the need to integrate these with long term objectives.

In other words, steps were required to be taken on a war footing with a well thought of and far-sighted vision and action plans, both in short term and long terms.

The New Crop Insurance scheme must be understood from that perspective. This is all the more relevant at a time when the country is facing drought for the second straight year due to poor monsoon rains.

Under the new scheme that would cost the government Rs 8,000-9,000 crore annually, the farmers’ premium has been kept at a maximum of 2 per cent for food grains and oilseeds, and up to 5 per cent for horticulture and cotton crops.

To be rolled out from the Kharif season this year, the much awaited scheme – Pradhan Mantri Fasal Bima Yojana – was cleared at the Cabinet meeting, headed by the Prime Minister Narendra Modi.

The new scheme, to be executed also by private insurance companies, is seen as a significant step by policy makers, farming community, and experts. The government’s move will enhance insurance coverage to more crop area to protect farmers from the vagaries of monsoon. Hence the scheme is considered very timely and also quite in tune with similar initiatives in some countries.

For Rabi crops, the farmer’s share has been rightly fixed at 1.5 per cent — against actual premiums of 8-10 per cent. For year-long cash crops and horticultural crops, this has been capped at 5 per cent.

The PMFBY will replace the existing two schemes National Agricultural Insurance Scheme (NAIS) as well as the Modified NAIS.

The official sources also clarified that in terms of Service Tax, as the new PMFBY is a replacement scheme of  NAIS / MNAIS, there will be exemption from Service Tax liability of all the services involved in the implementation of the scheme. It is estimated that the new scheme will ensure about 75-80 percent of subsidy for the farmers in insurance premium.

It is worth mentioning that the government is already shelling out around Rs 5000 crore annually average for the last five years for various disaster relief measures even as the government’s new move will now mean a tentative expenditure of about Rs 9000 crore. This will be more helpful, especially for farmers as the risk factor would be looked into. According to many, the ‘Pradhan Mantri Fasal BimaYojna’ will also rid farmers of the web of complex rules of the earlier insurance schemes.

The new scheme includes successful aspects of the existing schemes and “effectively addresses” whatever was lacking in earlier schemes.”The scheme has the lowest premium, it entails easy usage of technology like mobile phone, quick assessment of damage and disbursement within a time frame,” the PM said.

The government would have to cough out Rs 8,800 crore annually, whereas the coverage would be for a crop area of 194.40 million hectare. It is significant to note that after coming to power in May 2014, the Modi government had announced that it would bring a new crop insurance scheme.

Among others, expressing confidence that farmers will adopt this new scheme, the union Home Minister Rajnath Singh said it will help them tide over financial uncertainties.

Experts also say that the mechanism of higher subsidy for crop premiums is not out of line with international standards. The United States, for instance, covers over 120 million hectares and gives subsidy to the tune of around 70 per cent. China insures its farmers for a sown area of around 75 million hectares with a subsidy on premiums of about 80 per cent. In Indian context, during the next five years, the plan would probably cover over 50 per cent of the cropped area.

A Game-changer: There are a few significant features about the new scheme and this will make it both – farmers’ friendly and a game-changer in the long run. The new Crop Insurance Scheme is in line with ‘One Nation – One Scheme’ theme. “It incorporates the best features of all previous schemes and at the same time, all previous shortcomings/weaknesses have been removed,” an official announcement said and thus highlighting the end of the cob of complexities the farmers had to face earlier.

Importantly for the beneficiaries, risks leading to crop loss are to be covered under the scheme include: Yield Losses (standing crops, on notified area basis). Thus, a Comprehensive risk insurance is provided to cover yield losses due to non-preventable risks, such as Natural Fire and Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado. Risks due to Flood, Inundation and Landslide, Drought, Dry spells, Pests/ Diseases also will be covered.

Similarly, in cases where the majority of the insured farmers of a notified area, having intent to sow/plant and incurred expenditure for the purpose, are prevented from sowing/planting the insured crop due to adverse weather conditions, shall be eligible for indemnity claims up to a maximum of 25 per cent of the sum-insured.

In post-harvest losses, coverage will be available  up to a maximum period of 14 days from harvesting for those crops which are kept in “cut & spread” condition to dry in the field. For certain localized problems, Loss / damage resulting from the occurrence of identified localized risks like hailstorm, landslide, and Inundation affecting isolated farms in the notified area would also be covered.

Moreover, it has been made clear that there will be “no upper limit” on the Government subsidy. Even if balance premium is 90 per cent, it will be borne by the Government. Earlier, there was a provision of capping the premium rate, which resulted in low claims being paid to farmers. This capping was done to limit Government outgo on the premium subsidy. This ceiling has now been removed and farmers will get to claim against the full sum insured without any reduction.

The new scheme envisages among other things, that there will be the use of technology. More technology and science will be encouraged. Smart phones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will also be used to reduce the number of crop cutting experiments, sources say.

Making use of technology mandatory will also improve operational efficiency and will be beneficial to both – the farmers and the insurers, experts and insurance players say. Additionally, since farmer’s premium will be down, the uptake of policies would be high. Moreover, making the new crop insurance scheme mandatory for states will also mean that there will be increase in the list of policy takers. Adding catastrophic events also to this cover to protect farmers against crop loss/damage due to incidents like cyclone would be beneficial to all stakeholders yet again. (PIB)

Nirendra Dev is a Delhi based journalist

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Widespread Agricultural Distress: Hyderabad Social Entrepreneur Uses Big Data To Change Farmers’ Lives

The app, which provides all farming-related information and communication in Telugu on a single platform, is significantly reducing the time and cost of cultivation for a farmer in real time.

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The startup, which can sustain for next six months on its own, is receiving proposals from different investment companies and Naveen says he will go with whoever is close to his idea. Pixabay

At a time of widespread agricultural distress caused by successive droughts, unremunerative farming and debt-trapped rural economies, a young man with his mobile app is showing how change can be brought in the life of farmers at the grassroot level.

In 2016, V. Naveen Kumar, who had no personal knowledge of agriculture, was so moved by the suicide of a farmer in a village in his native Warangal district of Telangana that for the next three months he ran around like a man possessed, meeting farmers to understand their problems. He interacted with agri-entrepreneurs and other stakeholders to find if there is a way he can bring some change in the lives of the financially besieged farmers.

Today, over 1.24 lakh farmers in Telugu-speaking states of Telangana and Andhra Pradesh use his mobile app NaPanta to avail a host of services, all free of cost. And this MBA degree holder is satisfied that he is contributing his mite to bring some change in the way they practise agriculture.

NaPanta, which was started in June 2017, saw, surprisingly, thousands of farmers download the app. The launch of the pocket-friendly Reliance Jio and the boom in use of WhatsApp brought more people on the platform.

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While the information on app will clear regular doubts of farmers, for specific doubts a farmer can ask questions to a panel which includes agriculture scientist and experts.
Pixabay

The app, which provides all farming-related information and communication in Telugu on a single platform, is significantly reducing the time and cost of cultivation for a farmer in real time.

“I am confident that if farmers follow my platform, they will be able to save 20 per cent on expenditure and get 10 per cent extra yield. We can make 30 per cent difference,” V. Naveen Kumar, Founder and Managing Director, NaPanta, told IANS.

While the country has many apps to help farmers, there is no single app covering the entire gamut of agriculture activity ranging from selection of crops to locate the market offering highest price for their produce. From advisory services and weather information to market prices and e-commerce, the digital platform offers the comprehensive agri eco-system.

The app has tools like crop expenditure (which helps farmers track their expenses in an organized manner), crop protection, weekly agro advisory, agri forum, market price, agri e-commerce, crop insurance, weather, food processing technologies, and soil testing information.

A farmer can also buy or rent an agri-equipment as per the requirements of his crop cycle and can also sell his produce for the highest price without any middleman.

The app also allows farmers to access real-time and dynamic information pertaining to daily market prices of 300 agri-commodities across over 3,500 markets, along with three-year price trend.

Currently available in Telugu and English, NaPanta App provides complete pest and disease management details, covering 90 crops and with suggestions about 3,000 pesticide products.

Naveen Kumar, who earlier worked as a Credit Relationship Manager in ICICI Bank and later as Credit Risk Manager with HDFC Bank before co-founding apnaloanbazaar.com, a retail loan distribution services portal, says he is trying to build core competence among the farmers.

According to him, for all their requirements, small and marginal farmers depend on third parties like distributors of the companies.

“With no knowledge of agriculture practices and requirements of a particular farmer, they try to push their products for some extra profit and as a result the farmers either suffer crop losses or end up incurring huge expenditure.”

With agriculture extension officers of the government more focused on clerical related activities rather than extending actual help, he believes there is a huge gap between farmers and the government initiated activity.

“Farming is not depending on a single advisory. It is a combination of various services. We identified all that a farmer needs in day to day life and ensured that he has easy access to the advisory so that whenever he gets a doubt, he can get it cleared then and there,” he said.

Naveen said several states including Maharashtra and Tamil Nadu were showing interest in the platform. The app will be available in Hindi and Tamil in June-July this year. “If everything goes well in next 3 to 5 years, we will have our presence in 7-9 states,” said Naveen, who heads a five-member team.

While the information on app will clear regular doubts of farmers, for specific doubts a farmer can ask questions to a panel which includes agriculture scientist and experts.

NaPanta, an incubatee of International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) also gets the institute’s help in business activity, reaching the farmers and engagement with agri-input companies.

farmers

“With no knowledge of agriculture practices and requirements of a particular farmer, they try to push their products for some extra profit and as a result the farmers either suffer crop losses or end up incurring huge expenditure.” Pixabay

The startup, which can sustain for next six months on its own, is receiving proposals from different investment companies and Naveen says he will go with whoever is close to his idea.

With huge amount of data being generated on the digital platform, Naveen embarked on building big-data architecture with crowd-sourcing information. It is building database with information on major crops in a particular area, major insects which affect a crop, cropping system, sequential cropping model, pesticides and where the farmers sell their produce.

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He is confident that this data will be a goldmine in the coming years.

“This kind of crowd-sourcing information is not available in the agriculture sector in India. We are getting information from actual farmers and not third parties.” (IANS)