The State government will absorb the anticipated additional burden in the payment of premium for the Prime Minister’s crop insurance scheme (Pradhan Mantri Fasal Bima Yojana – PMFBY) in the light of the Centre’s move to reduce its share of premium payment, according to senior officials of the Agriculture department.
This year, the State government may have to shell out up to ₹150 crore so that farmers are not taxed in any way. Till now, after giving allowance for farmers’ share of 2% generally, the Union and State governments shared the premium amount equally.
Effective this year, the Centre had introduced the element of the status of irrigation in a given district for determining the premium amount and sought to restrict its assistance. Consequently, it divided each State into two broad categories — irrigated and un-irrigated districts. In respect of the irrigated districts, the Centre has decided to limit subsidy in premium to 25% of the sum insured and in un-irrigated, 30%.
The hitch will arise if insurance companies charge higher premium rates than the Centre’s stipulation. For example, if an insurance company fixes the premium rate of 33% for a crop in an un-irrigated district, the Centre and the State government would bear only 14% each with farmers taking the load of 2%. In such a case, the State government has to take care of the balance — 3%, the officials explain.
Irrigated districts are those having 50% or more irrigated areas and un-irrigated ones are those having less than 50%. Going by this definition, Tamil Nadu has nine un-irrigated districts of Salem, Virudhunagar, Dharmapuri, Namakkal, Ariyalur, Krishnagiri, Perambalur, Thoothukudi and the Nilgiris.
The other change in the guidelines of the scheme is that enrolment has been made voluntary. Earlier, all those who wanted to take loans had to have the insurance cover. But, this change would have no impact on Tamil Nadu as farmers who did not take crop loans constituted 70% to 80% of those covered by insurance.
Meanwhile, the farmers, who insured their crops during samba season last year, may start receiving claim amount later this month. Disbursal is likely to go on for three or four months and eventually, farmers may get a maximum of ₹1,000 crore this time towards compensation, the officials said. If this materialises, the total compensation paid to farmers in the State will be ₹9,000 crore since the PMFBY launch in 2016.
Payout to be less
The compensation for 2019-20 is expected to be less than that of previous year in view of a bumper harvest during the samba season. In the Cauvery delta region alone, the rice production was estimated at 20 lakh tonnes, a figure not yet cleared by the Central authorities.
With the kuruvai cultivation season getting underway, the authorities are taking steps to intensify enrolment of farmers. The cut-off dates for coverage of paddy in the delta are July 31 and in Madurai and Krishnagiri August 15.
The officials want farmers to join the insurance scheme in a big way, as about 70% of the farmers enrolled were compensated for their crop losses between 2016 and 2019.