The distress condition of farmers continues in an agrarian country like ours where a majority of the population depends on agriculture for livelihood. There has been growing demand by political parties and farmers' organisations for protection in form of subsidy to overcome the crisis, especially growing farmer suicides.
The Prime Minister has declared a number of schemes relating to agriculture development such as Pradhanmantri Krishi Sinchai Yojana, Paramparagata Krisi Vikas Yojana, Grama Jyoti Yojana and Pradhamantri Fasal Bima Yojana (PMFBY).
All these schemes are aimed at improving agriculture through irrigation facility, by adopting organic farming, improving soil health, revival of fertilizer plants, ensuring power for agricultural activities and timely credit and above crop insurance so that the farmer suicide can be arrested along with risk management of agriculture.
Farm credit target has been raised to rs8.5 lakh crore in lower interest rate. The credit has been linked to insurance. It will increase production and change the life of the farmers.
Agriculture in India is has been beyond the control of farmers as increasingly it depends on nature, weather, and monsoon as impact of climate change and on market forces after liberalization for which the State's intervention is highly required to protect the farmers and by that ensure food security of the people and livelihood of millions of rural poor. The crop insurance is directly linked to the producer communities of the country.
The PMFBY, a new national agricultural crop insurance scheme, will be implemented from Kharif 2016. In the words of Prime Minister the scheme is a festival gift to farmers of the country and it will boost agriculture. The Government will provide maximum subsidy on premium paid by the farmers much higher than earlier insurance schemes.
The plan is to double the current 23 per cent coverage to 50 per cent of farmers through the scheme in next two-three years. This scheme is primarily addressing the uncertainty and risk management in crop yielding faced by the farmers. The maximum insurance premium payable by the farmers is 2.0 per cent for Kharif, 1.5 per cent for Rabi and 5 per cent for annual commercial and horticulture crops.
The insurance covers loss of standing crops, sowing risk, post-harvesting damage and other localized risks also. In order to ensure scientific estimation of crop loss and timely payment of insurance money to farmer, modern technology such as remote sensing and smart phone etc will be used.
The subsidy in insurance premium will be jointly borne by the Central and State Governments and the farmers have to pay a very nominal amount as their share. The State will have to provide matching contribution. The insurance will cover farmers of all categories including the loanee and non loanee farmers whereas earlier it was limited to only to loanee farmers. There will be one company for the whole State.
The scheme will be implemented by 11 general insurance companies which include ten private insurance companies and Agriculture Insurance Company of India limited. The private insurance companies entering to agriculture insurance include The TATA -AIG , ICICI-lombard, Bajajaj Allianz, Future, Reliance, HDFC-ERGO etc.
The entry of private insurance companies in agriculture insurance sector will bring benefit to major insurance companies in expanding their business in the coming years with direct Government patronage. The Bajaj Allianz launches weather based crop insurance scheme for orange farmers in Nagpur of Maharastara. There has been increase in foreign direct investment in the country in different sectors becoming open up for more private players. It will have wider impact over the agriculture economy of our country in the long run.
The rs17,600 crore crop insurance scheme is primarily to cover crop loss due to natural calamities such as drought as it is reported that 207 districts in nine States have been badly hit by drought that affected about 90 lakh hectares of land last year. The affected States have demanded relief of about rs25,000 crore from the Center. The last year drought in Odisha affected 20,484 villages in 215 blocks in 26 districts and around 8,82,000 hectares of land sustained crop loss of over 33 per cent as reported by the State Government. In the Rabi crop of 2014-2015, as many as 1, 17, 582 farmers were covered with a sum assured of rs480 crore. The State Government has given the target to double the number of farmers to be covered under insurance during 2015-2016.
It is argued that crop failure is one the major reasons of farmer suicide that happened due to problem of drought, flood, water logging, cyclone, erratic rain, untimely rain, pest infestation, damaged seed, wild animals, failure of irrigation facilities, market fluctuations and many other local specific incidents.
Along with the traditional issues relating to agriculture such as land reform, dependence on traditional money lending, and irrigation, the issues of climate change and economic liberalization has posed a greater threat for the farmers of developing countries. Therefore the insurance coverage should include all kinds of risks involved in agriculture- not just the natural disaster. There has been demand for universal comprehensive crop and income insurance that covers both income and production risk of all crops and for farmers of all categories.
The issue of sharecroppers should be resolved and small and marginal farmers, Dalits and Adivasies and women farmers should be given subsidies with full State support. There have been reports of delay in getting insurance amount and unholy nexus of bank officials, insurance officials and farmers to siphon off the insurance money which needs to be checked by the Government so that genuine beneficiaries can be benefited out of the State fund for farmers.
There has been lack of awareness among rural poor farmers on various Government schemes including insurance schemes. The State Agriculture Department, farmer organisations and civil society bodies have not sufficiently motivated the farmers in accessing schemes and programmes, especially for the poor, Dalits, tribals and women farmers in the State. It is expected that and also the Central Government has guided the State to bring necessary changes in the State revenue laws to include all category of farmers specially the share crops and tribal farmers in the scheme .
About 70 per cent of people of the State depend on agriculture for their livelihood and Dalits and Adivasies constitute about 40 per cent of the population. So agriculture crop insurance is very vital.
There are a number of reasons of crop loss in Odisha including natural calamities. During last few years hundreds of farmers committed suicide in distress due crop loss. Agriculture Insurance Company of India limited in Odisha has covered seven crops that include paddy, mustard, potato, groundnut, green gram, black gram and sugar cane during Rabi season.
But like the input subsidy and credit facilities, the insurance scheme has absolutely no implication for the share croppers who are not being recognized as farmers particularly for States such as Odisha. There are also tribal and Dalit farmers who are not officially recognized as farmers and thus not eligible for any Government subsidy including crop insurance.
Many absentee land owners are taking the advantage of all subsidies and other facilities without being a real farmer and the genuine ones are deprived of all such benefits.
The insurance scheme should have equity in ensuring benefits to the farmers of marginalized groups who are not aware of insurance schemes of Government for the farmers, though they face all kinds of problems that lead to crop failure.
The poor farmers are deprived of due share from State resources while the rich and land owning farmers are disproportionately benefiting out of State schemes. It is unfortunate that the Government of Odisha has been delaying the process of recognizing share croppers as farmers and by that depriving the poor genuine farmers of their right to get subsidy in schemes such as PMFBY.
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