NDA in a tight spot as crop insurance backfires


Madhya Pradesh was the first State in the country to implement NDA Government’s much-touted Prime Minister Crop Insurance Scheme. At the time of its launch last year, politicians made farmers feel that if they buy the insurance, it will be panacea to all their problems. Prime Minister Narendra Modi himself came to MPin February 2016 to launch the scheme at a massive function organised in Sehore, the home district of CM Shivraj Singh Chouhan. Explaining salient features of the scheme to farmers, Modi said, “It is a historic decision; Even if he happens to be the only farmer who has suffered losses (in that village), he will still get benefit of the insurance scheme.”
It turned out to be just another political rhetoric. Buoyed by Modi’s promise, 36.40 lakh farmers bought
insurance for their kharif crop last year. Their heightened expectations were crushed to ground when 7.42 lakh farmers received insurance payouts for crop damages. Thousands of farmers received amounts in double digits, ranging between 17 and 70. Many were in for a rude shock when they received paltry amounts like 2.83 or 4.70.
As if to rub salt on their wounds, the Madhya Pradesh Government tried to showcase its ‘achievement’ on crop insurance. It organised grand celebrations, assembling hundreds of farmers and officers at glittering functions all over the State, spending lakhs of rupees for distributing insurance certificates. The ‘beneficiaries’ who were made to travel for miles to collect paltry compensation of 4, 17 or 20 were left stunned.
“It can’t buy even a cup of tea,” said Badamilal, who has become something of a legend in Sehore district for receiving the ‘princely’ amount of 4.70. An infuriated ‘beneficiary’, who received 17, told a news channel, “It can’t buy even a shroud if I commit suicide. Give the money to Shivraj Singh.” The MP chief minister is getting flak for Modi’s pet scheme. The story was repeated in many parts of the State.
The fiasco turned into a major embarrassment as the government attempted to put the PM’s and CM’s pictures on certificates of crop insurance. The publicity backfired. More than 250 farmers of a village in Khargone district, who received compensation of 2.83 each, demonstrated last December and burnt copies of their crop insurance certificates.
The BJP government’s obsession with publicity seems to be its undoing. It seems to have spent more money in publicity of its schemes than reaching out to the long-suffering farmers. For example, the MP government’s grand scheme of making agriculture a profitable venture. One of its major components is publicity. Of the 59 crore that the State Government spent last year under this head, as much as 35 crore was spent on publicity.
So who benefits from Prime Minister’s Crop Insurance Scheme? If the first year’s results are anything to go by, it is the insurance companies. Companies engaged in crop insurance business have just earned a profit of nearly 1,200 crore in a single season in MP. The insurance companies collected premium of 3,000 crore from farmers and
government and paid 1,800 crore as insurance benefit to those who suffered kharif damages last year.
“The scheme seems beneficial to insurance companies,” says former Chief Secretary of MP, Nirmala Buch, who is passionate about a farm that she cultivates at outskirts of Bhopal. There are others too who feel that the scheme is tailor made to benefit insurance companies. After all, insurance companies are in business to earn profit. They don’t run charities.
But the problem is that this profit is coming out of taxpayers’ pockets. It is the Government that literally foots the bill. Farmers are required to pay, roughly, one-fifth of premium. Remaining share comes from the state exchequer.
The government has, of course, an explanation for the low payouts of insurance money. Sources in the Agriculture Department say last kharif was the best in 20 years. A good crop means less insurance payout. Hence in certain areas, payments touched such ridiculous figures.
The average payout to farmers, official figures reveal, was 24,400. Of the 36.54 lakh farmers who had opted to insure their kharif crop last year, 7.42 lakh received insurance amount totalling 1818.96 crore. The farmers are expected to get more this year as the crops are bad, say officials. According to the Agriculture Department, insurance payouts this year may touch the high of 8,000 crore due to bad crops.
But farmers fail to understand insurance companies’ algorithm that they lost crop worth only 4.70 in their fields. This means that they lost just 100 grams of wheat! Kisan Jagriti Sangathan chief Irfan Zafari, who is agitating against crop insurance, calls it a ‘racket’. “Why such paltry amounts? Were not we promised full compensation by the Government for our crop loss?” he asks.
A statement of the MP Government, issued in September in the wake of insurance fiasco, reads out the fine print. The payouts were low in certain cases, clarifies the government, because the scheme is “not individual-based, but area-based.” The compensation that farmers received was based on average losses suffered in their area.
This totally negates what the prime minister made farmers believe. Coming closely on the heels of Mandsaur firing, negative publicity over crop insurance has rattled the MP Government. Stung by response of farmers, Shivraj Singh is learnt to have asked the agriculture department to take up the matter with the union government. “We are writing to central government to fix a minimum amount of payout under crop insurance,” said Dr Rajesh Rajora, the principal secretary of the Agriculture Department.
This is, ironically, happening in a State that BJP was touting as the most farmer-friendly government in the country. The party presented Shivraj Singh Chouhan as the poster boy to help the farmers in distress. Chouhan says he is himself a farmer and swears by farmers, promising to double their income. The State even boasts of an agriculture cabinet.
Madhya Pradesh has won national awards for highest food production five times during Chouhan’s tenure. It has become second only to Punjab in its contribution to the central wheat pool. It registered an agricultural growth rate of 13.9 percent over the five-year period, 2010-15, compared to the national average of less than 4 percent. In 2014-15, the agriculture sector grew by a whopping 20.11 percent in MP.
Yet every five hour a farmer commits suicide in Madhya Pradesh. Last year, a total of 1,982 farmer committed suicide. According to NSSO survey, half the farmers in MP are debt ridden. Agriculturists and experts say farming has become unremunerative. And apparently, half-baked ideas like Prime Minister’s Crop Insurance Scheme are not the panacea, as the Government believes.

The views expressed are author’s own