The new insurance scheme for farmers comes as a ray of hope, but it has to be implemented properly if its full potential has to be realized.
By Ramesh Menon
Life for Indian farmers has ne-ver been easy. Farming is no longer the attractive proposition it was as returns from it are unpredictable given the vagaries of the weather. There is either too much rain or too little. Suicides by desperate farmers unable to pay back debts or support their families have been on the rise. Numerous instances of farmers not harvesting their onion or potato crops because market prices have crashed have surfaced. And when prices of vegetables like onions rise, it is the middleman who laughs all the way to the bank, not the farmer.
Today, agriculture is one of the most high-risk sectors. Uncertainties dog it at every stage: accessing good healthy seeds, monsoon failure during sowing, pest attacks, sudden showers during harvest, low prices, problems of storage and distribution and so on. I once asked a golf cart driver why he had left his farm in Pune where he could have strutted around as a landlord. His reply was telling: “No one wants to marry a farmer. Now, I wear a uniform and go to work. That is seen as respectable.”
DISMAL PICTURE
Isn’t it high time that we take our farmers and the farming sector seriously? According to the 2011 Census, 263 million (that’s 22 percent of the total population) are involved in agricultural operations. As much as 17 percent of the gross domestic product comes from agriculture. And yet in the last fiscal, agriculture has grown at a measly rate of two percent!
The government’s proposal to bring in a new crop insurance policy is an attempt to deflect criticism that it has neglected farmers. With polls in Assam, Kerala, Tamil Nadu, Puducherry and West Bengal due this year, it’s an adroit move.
Given this dismal picture, a new insurance scheme which adequately covers farmers, comes as a ray of hope. The government’s Crop Insurance Scheme, unveiled by Prime Minister Narendra Modi recently, may well come as a succor to thousands of farmers. Modi said it would bring a major transformation in the lives of farmers as the new scheme was an improvement over previous ones and expanded the definition of disaster. It would use technology to ensure quick assessment of crop damage and disbursement within a time-frame.
Home Minister Rajnath Singh called it a “suraksha kavach” (security shield) for farmers. According to agriculture secretary Siraj Hussain, the government plans to cover around 50 percent of agriculture land in the next three years. This insurance scheme is going to cost over `8,000 crore. If it takes off as planned, it will cover around 195 million hectares.
In what is seen as a major policy outreach to farmers, the government will pay the majority share of the premium, leaving the farmer to bear only 1.5 per cent for rabi crops and two percent for kharif crops. For commercial and horticulture crops, the premium for farmers would be five percent. This will make it affordable for many poor farmers. In previous insurance schemes, actual payouts to farmers were minimal. The rest of the premium, other than the small percentage paid by farmers, is to be shared equally by the state and central governments. However, this would work only if payments are made in time. It is the farmer who will suffer if payments by the state or the center are delayed or not done. Unseasonal rains and floods will also count for post-harvest losses coverage.
WOOING RURAL INDIA
Sources say that this scheme will deflect continuing criticism of the Modi government that it had not included farmers in its development agenda. This is the first move by it to woo rural India. Many see it against the backdrop of the BJP’s rout in the Bihar elections last year. With polls scheduled in 2106 in Assam, Kerala, Tamil Nadu, Puducherry and West Bengal, political observers see this as an adroit move. Modi has lined up three cabinet ministers to talk about the scheme and get it noticed and talked about. The thinking in the government is that currently, relief to farmers facing extreme weather anomalies is at best political tokenism. This, it was felt, has to change.
Things have not been looking bright on the agricultural front in India. In 2013, 0.35 million hectares of crops was affected in five states. In 2014, this went up to 5.5 million hectares in six states. In 2015, 18.23 million hectares of crops were affected in as many as 15 states. This meant that an area having 75 percent of India’s population where 81 percent of food grains were grown was affected. In 2015, we saw how the weather in the rabi season was irregular and caused a lot of damage.
In reply to a question, the Rajya Sabha was infor-med in May last year that 182.38 lakh hectares of agricultural land was estimated to be damaged.
This scheme, if implemented properly, would therefore be of great help to farmers. Ultimately, farmers will realize that crop insurance is something they would have to fall back upon as climate changes become increasingly unpredictable due to greenhouse emissions.
Devendra Singh, additional secretary, Lok Sabha, said that the government move to reduce the premium rate in crop insurance will turn into a gamechanger if implemented properly. “It can revamp the agro-economy, ensure sustained food security, create employment and have a multiplier effect on the economy,” he said.
However, the biggest losers if disaster strikes will be the large number of farmers who have taken land on lease. As tenants, they cannot claim insurance as they will not be able to produce proof of owning land.
EDUCATING FARMERS
But, insuring crops cannot be the only solution. Farmers need to be educated on how to manage risks by choosing crops that are safer, intercropping to keep away pests, managing soil strength, pesticide management and using water intelligently to squeeze out optimum benefits.
In 2013, unseasonal rains destroyed a large area where rabi crops flourished. At that time, it was seen as a freak phenomenon. But the damage worsened in 2013, 2014 and 2015. There is reason to be apprehensive.
“Frequency of extreme weather events and droughts may increase with climate cha-nge. India needs an effective, inclusive and universal insurance scheme to act as a safety net for farmers. The new insurance scheme requires some key changes to improve its effectiveness. We should not be under the illusion that only farmers will pay the price for a natural calamity. Eventually, we all will be forced to pay the price, directly or indirectly. If the farmer fails, this country fails,” warned Chandra Bhushan, deputy director-general, Centre for Science and Environment (CSE), which recently released a seminal report called “Lived Anomaly” which highlighted the plight of farmers at the mercy of nature.
Food and policy analyst Devendra Sharma told India Legal that the new insurance scheme does not address fundamental issues that farmers have been facing. “It is just old wine in a new bottle. The old National Agricultural Insurance Scheme has just been dressed up. However, it will be a great bonanza for insurance companies.”
CORRUPT SYSTEM
CSE pointed out that even with more use of technology, dependence on existing manual crop-cutting experiments or subjective methods of visual examination of crop loss would continue in estimating losses. Currently, in crop loss assessment, the patwari plays a key role. The system is not transparent and full of loopholes and corruption. The success of the new insurance scheme will strongly depend on strengthening and improving institutions at the local level.
However, the new insurance is not clear to Abhilash Gorhe, a farmer in Nasik, who says that he finds it confusing. This shows that the scheme needs to clearly prescribe the conditions under which claims can be made and give details about how losses would be assessed. One thing is that premiums would have to be realistic for the business to survive. Insurers are not in the business of social work. Subsidies have not worked economically and they never will. Insurance companies also need to see an opportunity to get into this sector that seemingly seems risky.
Noted environmentalist Sunita Narain said: “Farmers do not have confidence in crop insurance schemes. Their wariness is rooted in past experiences when they did not receive the insurance payout because of administrative issues, incomplete or absent paperwork or identification, ineligibility due to changed circumstances or guidelines not followed. Operational guidelines of this new scheme need to be improved and implemented well to make it farmer-friendly.”
WISE ALLOCATION
Previous insurance schemes by the NDA and the UPA governments have assessed localities rather than individual farms. This scheme also allocates 15-20 districts to one insurance company so that it can work better in terms of assessing the damage and stop fraud by farmers with false claims. With the use of sophisticated drones having re-mote-sensing equipment, insurance companies can ensure speedy and accurate settlements.
However, in the new scheme, there is no mention about developing an agriculture intelligence information system which could serve as a platform to collect farm-level data on all parameters. This system will help estimate crop loss smoothly, accurately, quickly and in a more transparent manner.
Will this new insurance scheme become a safety net for the Indian farmer? It is a question that millions of farmers and others in the agriculture sector are waiting to see.