Pradhan Mantri Fasal Bima Yojana

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• Recently, the state of Andhra Pradesh has decided to rejoin the Pradhan Mantri Fasal Bima Yojana (PMFBY) from the ongoing Kharif season.

More about the news

• The reason behind opting out of the scheme:
  • Andhra Pradesh decided to opt-out, it had mentioned four reasons: 
    • The scheme should be voluntary; 
    • States should be given options to choose risk; 
    • The scheme should be universal, and the cut-off date for enrollment should be flexible; and 
    • The state should be given the option to use their own database of E-crop, an application used by the AP government to collect information about crops.
• The Union government is also reaching out to the five other states—Bihar, Jharkhand, Gujarat, Telangana and West Bengal—to bring them back on board to implement this crop insurance scheme.
  • These six states had implemented the PMFBY initially. 
  • But they opted out at different times in the last four years for different reasons.
• Government efforts:
  • In February 2020, the government revamped the PMFBY by restricting its premium subsidy to its flagship crop insurance schemes to 30% for unirrigated areas, and 25% for irrigated areas (from the existing unlimited). 

• It also made the enrolment of farmers voluntary from the 2020 Kharif season.

• The Standing Committee on Agriculture, Animal Husbandry and Food Processing also asked the department of agriculture and farmers welfare to address the issues and make the scheme more attractive and beneficial to the farmers, especially in the states prone to natural calamities.

Challenges:

• The Parliamentary Standing Committee on Agriculture presented a report on Pradhan Mantri Fasal Bima Yojana and highlighted the major issues about the scheme:
  • Withdrawal of states from the PMFBY.
    • States like Bihar, Jharkhand, Gujarat, Telangana and West Bengal have opted out of the scheme for various reasons.
  • Delay in settlement of claims.
    • Major issues for opting out are denial and delay of claims along with a huge subsidy burden on state governments.
  • Lack of coordination between the different stakeholders.
    • Some of the states which have opted out of the scheme have their own insurance schemes.
      • All agricultural activities in Andhra Pradesh have already been brought under Rythu Bharosa Kendras (RBKs). 
  • Lack of awareness among the farmers related to the scheme.
    • Most tribal farmers are small farmers, own farm plots with steep slopes and are dependent on the monsoon for their only season of farming.
  • The scheme has no provision for establishing a profit-sharing Corporate Social Responsibility (CSR) fund.
• Insurance agencies:
  • Public and private insurance agencies bid with their premium rates for a district in a state.
  • The lowest bidder is awarded the contract to provide insurance under the scheme for one agricultural season only.
  • This discouraged them from investing in that district in terms of awareness activities or assigning personnel.
• Methods used to determine crop loss:
  • The most fundamental problem in the design of the scheme is the method used for determining crop loss in an area.
  • The scheme outlines a series of crop-cutting experiments (CCEs), which are based on a method standardized by state agriculture universities.

Recommendations:

• The Parliamentary Standing Committee on Agriculture committee:
  • It called for local public representatives such as members of Parliament and legislative assemblies to be nominated in District Level Grievance Redressal Committees (DGRCs). 
    • This would ensure the accountability of concerned stakeholders and enhance the acceptability of PMFBY amongst farmers
  • Queries and grievance redressal:
    • The ministry should also provide a toll-free number of three-four digits for queries regarding PMFBY, registration of complaints by farmers and information regarding action taken on their complaints.
    • It also urged the popularisation of the number and added that complaints were to be attended in a time-bound manner for effective implementation of PMFBY.
  • Spend profits on CSR: 
    • The companies should spend a set amount of money on rural development under Corporate Social Responsibility (CSR).

Source: DTE