by Sajjata Sangh 7th March 2017, Ahmedabad.
A state level workshop on the subject was organized on 7th March, 2017 in
Ahmedabad by Sajjata Sangh, a state level network of civil society
organizations in Gujarat and Development Support Center.The focus of the
workshop was on Prime Ministers’ Fasal Bhima Yojana (PMFBY) and the need
to include ‘non-loanee’ farmers in the insurance scheme.
PMFBY is a flagship program of the NDA Government. Started in 2016, the
budget for the program was increased substantially during the year 2017-18
to Rs.13,240 crores. The scheme offers highly subsidized premium at 2% for
Kharif crops to cover 40% of the cropped area. A quick study commissioned
by Sajjata Sangh brought out that the scheme has mostly covered farmers
who have taken loan from banks as it is tied to loans. The quick study by
Mr. Bhimsi Ahir brought out that those who are out of the formal
institutional credit are excluded from getting the benefits of the
insurance scheme. This was further reinforced by the observations of the
Principle Secretary, Agriculture and the Joint Director, Agriculture, in
charge of the program at the state level.
Consultations brought out the need to find ways of reaching out to farmers
and get more of the ‘non-loanee’ farmers to apply. Systematic bottlenecks
such as producing a formal tenancy agreement, complicate inclusion of
tenants into the program. The transaction costs of inclusion of non-loanee
farmers are high and must be provided for within the scheme or by the
insurance companies. Exploring ways of making the Farmer Producers
Organisations (FPOs) or SHG federations as channel agents for insurance,
sharing about 4% of the premium for their support functions, would help
not only in making the program more inclusive but also reduce the burden
on Insurance Companies in reaching out to the farmers. Questions of
extending insurance to mixed-crop systems, most prevalent in the rainfed
areas still remain.
Crop insurance must not be seen as the only strategy to mitigate risk in
rainfed areas; particularly in the context of climate change. It must be
an integral package of interventions / a comprehensive approach to secure
livelihoods of farmers dealing with risk mitigation in rainfed areas
dealing with residual risk. PMFBY will be more effective if it is not a
stand-alone intervention, is another conclusion emerging from the
Further deliberations, brought out the need to take this forward within
the RRA Network involving more organizations across different states in
such a policy-action dialogue for a more inclusive and comprehensive PMFBY.
There is also a need to understand the nuances of the scheme in its
operation and variants of it across the states.
Thanks to Shri. Sachin Oza, Director of DSC Foundation.