New Delhi, March 13 Congress Rajya Sabha member Rajeev Shukla raised this issue in the House on Friday, stating that insurance companies were not providing farmers with proper and full compensation.
He said this was a critical issue as it affected millions of farmers across the country.
Citing examples from several states, he highlighted serious flaws in the scheme. In Maharashtra, after the crops were damaged, the compensation was a meager Rs 21 in some accounts, Rs 8 in others, and only Rs 3 in some cases.
He said everyone knows about the Prime Minister's Crop Insurance Scheme, which was launched with a significant objective. It was intended to allow farmers, by paying a small premium, to protect their crops from natural disasters such as drought, flood, hailstorm, or pests and diseases. In times of crisis, they would receive financial support and maintain a stable income.
Shukla stated that in the Bareilly district of Uttar Pradesh, floods devastated paddy crops. Farmers filed for insurance, yet the compensation amounts were minimal -- Rs 3.76 in certain cases and Rs 2.62 in others. He questioned how a farmer could plant a new crop with just Rs 5, purchase diesel for Rs 3, or acquire pesticides for Rs 2.75, sarcastically implying that farmers "would need to display such sums as evidence of their insurance coverage."
He said insurance is meant to provide support during crises, but the situation is such that farmers feel they cannot even recharge a mobile phone with this money, let alone secure their crops.
The Congress leader further said the problem was not just about the amount. In many places, physical verification of crops does not happen on time. Officials arrive when the crop is already destroyed, and it’s time for re-sowing. Often, the portal is down, or servers fail, and farmers run around to claim compensation but still receive nothing. On top of that, under the “area approach”, averages are calculated -- even if a farmer’s crop is completely ruined, they are told that the overall area is normal.
He also pointed out that farmers pay only 1.5 to 2 per cent of the premium while the government provides the rest -- public money. Insurance companies thus collect thousands of crores in premiums. In normal years, claims are few and companies' profit, but when it is the farmer’s turn, compensation comes in trivial amounts like Rs 3 or 5. Sometimes premiums are even deducted from farmers’ accounts without clear information.
Shukla said this system, with the risk borne by farmers and the government, but the profit goes elsewhere, is unfair.
He urged the government to set clear timelines for settlement and payment of insurance claims, ensure timely and transparent crop damage surveys, carry out assessments at the actual farm level instead of the area approach, and hold insurance companies accountable so that farmers receive fair and adequate compensation.