With farming growing more vulnerable to vagaries ranging from weather to pests and market risks, a whopping 70 per cent of farmers in Odisha still are not insured from the drastic side-effects. If paddy farmers alone are to be considered, a massive 95 per cent of them are exposed to the multifarious shocks in the State.
According to the data available with various insurance companies, including the Agriculture Insurance Company, ICICI-lombard etc, around 14 lakh farmers from over total 45 lakh farmers in Odisha are currently covered by insurance support to their crops. But a mere around 2 lakh paddy farmers in Odisha could have their crops insured. This low coverage does not bode well when paddy is the principal crop in Odisha and paddy farmers bearing the brunt of floods, droughts and pests in around 90 per cent of the years since 2000, when the subsidy linked insurance scheme was launched in the country.
Significantly, the low coverage moreover points to a serious lapse on part of Agriculture Department as a whopping 41-43 per cent are unaware of existence of any insurance facility. This damning revelation was made by National Sample Survey (NSS) recently. In contrast, only 4 per cent don’t have resources to pay the premium, adds the report. However, a recent Assocham-Skymet survey found around 11 per cent are unable to pay their insurance premium. Both surveys found a significant number of farmers ranging from around 15-20 per cent are uninterested in the scheme. The main reason: Complex terms and conditions and delay in getting claims.
According to Insurance Regulatory Development Authority (IRDA), as the crop damage assessment exercise takes a long time, farmers are unable to get their claims even by next kharif sowing. Assocham report voiced concern over undue delay in claim settlement and payment especially when farmer suicides have become a phenomenon in the country. Though Assocham said that Weather Based Crop Insurance Scheme (WBCIS) is more farmer friendly than other crop insurance schemes, Odisha has seen coverage under WBCIS to only few thousands of farmers.
The low coverage also points to a more serious aspect of agricultural credit in Odisha. Since the State Government has made the MNAIS compulsory for all loanee farmers taking seasonal agricultural operation loans from banks for the notified crop of paddy, the coverage to below 1 lakh of a total of 42 lakh farmers in State in kharif 2013 shows that institutional credit in Odisha is availed by a small section of farming community. This has a grave portend as credit from private lenders is the main reason behind farmer suicides in the State. According to NSS report, farmers having below one hectare land mostly source credit from private lenders.
However, Assocham report finds present crop insurance schemes designed to address crop losses a little respite for farmers affected by wild price fluctuations like the recent potato crisis in Odisha. New Farm Income Insurance scheme to be implemented by the Modi Government in kharif — 2015 could bring relief as it provides insurance cover to farmers against loss in farm income - means shortfall in actual income over that of guaranteed income in a notified area — to address potato-type crisis.