Sivaju Subbiyan is a 52 year old farmer in Cholagankudikadu village of Thanjavur district, which is known as the rice bowl of Tamil Nadu. Subbiyan owns two acres (0.8 hectares) of land where he grows paddy during rabi (winter) season. His last year’s crop got destroyed due to cyclone Nivar which hit Tamil Nadu and its neighbouring states in the end of November.
The paddy farmer expected that since he had duly paid his premium under the Pradhan Mantri Fasal Bima Yojana (PMFBY) to insure his crop, he would be able to procure the claim amount which would help to sail the expenses for his family of four.
However, a year later, Subbiyan is still waiting for the claim amount from the insurance company. “My income was merely Rs 2000. I have taken money on loan from other farmers to make ends meet this year. I am yet to receive money against my crop insurance,” he told Gaon Connection.
Many other paddy farmers like him share a similar woe in Thanjavur district. These farmers lost their crop during Cyclone Nivar last November and are yet to receive their insurance claim amount. One hundred and forty farmers from Subbiyan’s Cholagankudikadu village alone are awaiting their due. There are many more farmers in the neighbouring villages too.
Subbiyan told Gaon Connection that he had paid a premium of 1.5 per cent (Rs 1450) for insurance of his rabi crop last year to the Thanjavur Central Cooperative Bank and was issued a manual receipt by the bank, on November 24 2020, after provision of all the necessary details such as his farmer ID, aadhar details, etc.
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However, when the 52-year-old farmer tried to apply for the claim amount this March, his claim was rejected citing that his details were never enlisted for the scheme.
“The bank officials have refused to help me. I am even unaware of the type of insurance I was enlisted in. I had provided my details and paid the amount like others, despite that I haven’t received any compensation,” he complained to Gaon Connection.
What is the crop insurance scheme?
The Pradhan Mantri Fasal Bima Yojana is the flagship crop insurance scheme of the Government of India which was launched on January 13, 2016. The scheme was envisaged as a milestone initiative to provide a comprehensive risk solution for farmers at the lowest uniform premium across the country.
This central scheme aimed to support sustainable production in the agriculture sector by way of providing financial support to farmers suffering crop loss or damage arising out of unforeseen events, stabilizing the income of farmers to ensure their sustenance in farming among others.
The scheme covers food and oilseeds crops. The prescribed premium to be paid by farmers is two per cent for kharif crops and 1.5 per cent for rabi crops. The premium cost over and above the farmer share is equally subsidised by the state and central government.
This crop insurance scheme covers localised calamities, germination risks which may arise due to deficit rainfall or adverse seasonal conditions, standing crop loss because of non-preventable risks or post-harvest losses that can be covered for upto a maximum period of two weeks from harvesting.
Sivaju Subbiyan had insured his paddy crop under this central scheme only. And so had Prabakaran Balasubramaniyan, another paddy farmer from Cholagankudikadu village, whose claim amount is also pending for the past one year.
Data mismatch and pending insurance claim
“Whenever we enter our details in the fasal bima portal, it shows our application is pending verification,” Balasubramaniyan told Gaon Connection. “We paid our premium on time, and provided all the details asked by the bank [Thanjavur Central Cooperative Bank] but the insurance officials say that there is a mis-match between the details (land-records) provided to them by the bank and our claims because of which our application is still pending,” he added.
As per the details provided by Balasubramaniyan, he had paid a premium of Rs 1697 for insurance of his paddy-II crop which was filled in the rabi season of the year 2020. The premium was paid to IFFCO-Tokio General Insurance Company and he was provided a premium subsidy of Rs 21,948 by the government. However, he can’t apply for an insurance claim because his details are yet to be processed by the bank, said the paddy farmer.
The farmers had furnished all their details to be enrolled in the PMFBY scheme to the bank. The information uploaded by the bank was inconsistent with the details provided by the farmers.
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In some cases like Balasubramaniyan’s, the correct data regarding the land he owned was incorrect whereas in Subbiyan’s case the details weren’t entered at all. Hence, when they tried to apply for the claim for their respective pieces of land at the insurance company, their claims were rejected since the details provided on the portal did not match with the claim the farmers tried to seek.
According to news reports, the Federation of Farmers Associations of Cauvery Delta Districts on October 28 had urged the central government to address the shortcomings in the scheme which favoured insurance companies rather than farmers.
The federation’s general secretary, Arupathy Kalyanam, reportedly urged the Prime Minister to fix the base compensation under the scheme at 20 per cent of the insured amount in order to safeguard the interest of farmers. He reportedly claimed that insurance companies in Tamil Nadu had wiped up a crop insurance premium of Rs 3,176.53 million from 1.3 million farmers, but had paid compensation of Rs 15,970 million to 0.6 million farmers.
Evaluating how the crop insurance scheme impacts rural lending, Ruchbah Rai, an associate researcher at ORF online wrote in her paper titled Pradhan Mantri Fasal Bima Yojana: An assessment of India’s crop insurance scheme that insurance companies and regulators need to take a hard look at the efficacy of the PMFBY scheme. The paper stated, “Claims are not being honoured and insurance companies are making high profits without the benefits trickling down to the farmers. Left unchecked, this will erode the credibility of the financial sector. Without a credible financial sector, the solvency positions of rural banks will be at stake. This, in turn, will impact rural-lending and can lead to a further decline in agricultural productivity.”
In addition to this, another news report highlighted that over the period of five years, the scheme has benefited 83 million farmers however a major chunk of smaller farmers still remain out of the crop insurance network. The percentage of marginal farmers in the scheme has seen a decline from 18.08 percent to 16.55 percent for kharif between 2018 and 2020 whereas the participation of small farmers is between 63-68 percent.
Gaon Connection contacted Dinesh Ponraj Oliver, the district collector of Thanjavur, but he refused to comment on this issue and directed to contact IFFCO Tokio, the insurance company. Despite repeated efforts, the regional head of IFFCO Tokio, S. Sivaraj was also unavailable to comment.
No cyclone relief
While Subbiyan was fortunate enough to have been paid Rs 15,000 as the Nivar cyclone relief amount by the state government for his crop losses, a few others like Murgeshan Duraimanickam didn’t even receive this relief amount.
Duraimanickam owns close to three acres of land in Cholagankudikadu village where he cultivates paddy and for which he paid a premium of Rs 1,500. According to the 40-year-old farmer, he lost his paddy crop due to the cyclone last November. Neither was he paid any relief amount for his destroyed crops, nor has he received any claim for his crops, Duraimanickam told Gaon Connection.
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“Apart from my farmland, I also own cows which help to supplement my agricultural income, however I am not sure if I will get a good amount for this year’s crop too since it has been raining since the last week and if this continues then our crop will be destroyed,” the 40-year-old farmer, the sole earning member of his family, told Gaon Connection.
