Crop insurance in India: Status of PMFBY against different crop insurance schemes

Crop insurance has been implemented in the country since 1972, yet it has been beset with several problems such as delayed payment of claims, high premium, lack of transparency and delay in conducting crop cutting experiments etc. From these schemes none of them has been able to make a significant impact on farming system; as just 23.50 per cent of farmers were insured in kharif 2016. The existing relief and compensation criteria for farmers against crop loss was adhoc, messy and politicized and was ineffective to bring well-timed and satisfactory relief to affected farmers. This research article examines the cumulative performance of different crop insurance schemes implemented time to time. The claim premium ratio in First Individual Approach Scheme was 8.34, indicating that for every one rupee of premium collected; the scheme paid Rs 8.34 in claims. It shows high out go in the scheme. The benefits of CCIS were highly twisted towards few states and many more failures found in these schemes. Under PMFBY from kharif 2016 to kharif 2017, there has been a significant increase in the number of gross premiums (21 %), claims paid (64 %) and farmers benefitted (29%), respectively. The difference between gross premium and claim paid in the Kharif season has abridged and indicated a divergence in the data on the payout of claims and the profits made by private insurance companies. The new scheme revealed that overall area insured and farmers covered were decreased over the years from Kharif 2016 to Kharif 2018. On the other hand, there has been a significant increase in the number of gross premiums as 45 per cent. The PMFBY has therefore failed to achieve the targets, i.e. increasing the area and the number of farmers insured. The exclusion under the scheme are-risks and losses arising out of war and nuclear risks, malicious damage, theft, grazed and destroyed by domestic and wild animals.