Lok Sabha Question No. 3866 (UNSTARRED), answered on 2021-12-21
Subject: Crop Insurance Guidelines
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Sanjay Haribhau Jadhav, Bhavana Gawali (Patil), Omprakash Bhupalsinh alias Pawan Rajenimbalkar, Krupal Balaji Tumane

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA UNSTARRED QUESTION NO. 3866

TO BE ANSWERED ON THE 21 ST  DECEMBER, 2021

## CROP INSURANCE GUIDELINES

3866.  SHRI SANJAY JADHAV:

SHRIMATI BHAVANA PUNDALIKRAO GAWALI: SHRI OMPRAKASH BHUPALSINH ALIAS PAWAN RAJENIMBALKAR: SHRI KRUPAL BALAJI TUMANE:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether Pradhan Mantri Fasal Bima Yojana (PMFBY) is effective for the compensation of crop loss during natural calamities, if so, the details thereof;
- (b) whether the Central Government, State Governments and farmers give their share to the designated insurance companies, if so, the details thereof;
- (c)  whether  insurance  companies  have  not  provided  the  benefits  of  crop  insurance  to farmers by formulating many new rules and if so, the reasons therefor;
- (d) whether the Government has reviewed the same including the details thereof;
- (e) whether the Government is aware that the rule made by insurance companies to apply for the compensation of crop loss within 72 hours is very difficult and inconvenient;
- (f)  the  direction  given  to  the  insurance  companies  for  the  convenience  of  farmers  as electricity and internet gets affected during natural calamities and the monsoon; and
- (g) the steps taken by the Government to change the said rule and to protect the interest of farmers affected during natural calamities?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी (SHRI NARENDRA SINGH TOMAR)

- (a) : Yes Sir.  From inception of the scheme till 2020-21 cumulatively 2,938.7 lakh farmer applications  for  a  sum  insured  of  Rs.  10,49,342  crore  have  been  enrolled  under  the scheme.
- (b)  :  The  actuarial/bidded  premium  is  charged  by  implementing  insurance  companies under  Pradhan  Mantri  Fasal  Bima  Yojana  (PMFBY).    Lowest  premium  quoted  by  the insurance company is the effective premium in the specific area/crop. However, farmers

have to pay maximum 2% of sum insured for Kharif, 1.5% for Rabi food and oilseed crops and 5% for commercial/horticultural crops.  The balance of actuarial/bidded premium is shared/paid  to  the  implementing  insurance  companies by the Central and  State Government on 50:50 basis and 90:10 in case of North Eastern States from Kharif 2020 season subject to other provisions of the scheme.

(c) : The scheme is being implemented as per provisions of Operational Guidelines of the scheme formulated  by  the  Ministry  of  Agriculture  and  Farmers Welfare  and  not  by  the rules framed by the insurance companies.

(d) & (e)  : Question does'nt arise in view of (c) above.

(f) & (g) :  Pradhan Mantri Fasal Bima Yojana (PMFBY)  envisages coverage of  risk from pre-sowing to post-harvest losses, increase in sum insured by equating the sum insured to  scale  of  finance  or  value  of  notional  average  yield  to  provide  adequate  claims proportionate to their crop damage.     Further, timelines for each and every activity like enrollment,  submission  of  yield  data  by  State  Government  to  insurance  companies  for calculation of claims, workout and settlement of claims etc. alongwith penalty provision on default and dispute/grievance redressal mechanism has been provided in the Operational Guidelines of the Scheme.

PMFBY  is  an  yield  index  based  scheme  and  mainly  implemented  on  area approach basis.  Season-end claims, which constitutes  the major part of the claims, are worked  out  on  the  basis  of  shortfall  in  actual  yield  viz-a-vis  the  threshold  yield  in  the notified area as per given formula in the scheme.  No intimation of loss in this regard is required by the farmers.

However,  losses  due  to  localized  risks  of  hailstorm,  landslide,  inundation,  cloud burst & natural fire and post-harvest losses due to cyclone, cyclonic/unseasonal rains and hailstorm  for  a  specified  period  of  14  days  after  harvest  are  calculated  on  individual insured  farm  basis  on  inspection  by  a  Committee  constituted  by  the  concerned  State Government comprising  of State officials,  officials  from  insurance  companies and  loss assessors.   Hence, as provided in the Operational Guidelines farmers have to intimate the loss of their crops to the insurance company/State Government/ financial institutions within 72 hours of these losses.  Originally the period for intimation of loss was 48 hours and was revised to 72 hrs. in 2018 after detailed consultation with all stakeholders as well as keeping the convenience of farmers in mind.    Further, 48 hours have been provided over and above this period for intimation by State Government/financial institutions to the insurance  companies.        Various  modes  both  electronically/online  and  physically/offline like  intimation  to  the  insurance  company'  local  office,  banks,  concerned  department  of State Government, web portal, toll free number etc. are available for intimation of losses on  individual  farm  level.    These  claims  are  assessed  by  a  joint  committee  comprising representatives of State Government and concerned insurance company.   But, as per provisions of the scheme, if the crop losses are wide spread in nature i.e. more than 25% of the insured area is affected, then the localized/post harvest claims are also worked out on sample based crop loss assessment basis.    Also, there  is a provision to pay claims towards  prevented  sowing/failed  germination  and  adhoc  claims  in  case  of  mid  season adversity.

Though  the  claims  are  worked  out  and  settled  by  the  implementing  insurance companies,  but  the  yield  data  for  settlement  of  season-end  claims  is  provided  by  the concerned State Government. Similarly, individual farm level crop loss assessment is also carried out by the joint committee constituted by the concerned State Government to work out the admissible claims.

Revision/improvement  in  the  crop  insurance  schemes  is  a  continuous  process. Based on the experience gained, views of various stakeholders including States and with a  view  to  ensure  better  transparency,  accountability,  timely  payment  of  claims  to  the farmers and to make the scheme more farmer friendly, Government has comprehensively revised  and  revamped  the  Operational  Guidelines  of  the  Pradhan  Mantri  Fasal  Bima Yojana  (PMFBY)  with  effect  from  Rabi  2018  and  Kharif  2020  respectively  to  ensure targeted delivery of benefits of the scheme to the farmers adequately and timely

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