Planning a revival
Given how the Indian economy rests on the rusting pillars of agriculture, addressing agrarian and rural distress are, in fact, matters of very serious concerns as they hold the potential to affect the bigger economic scene. Already a matter of pressing urgency that rural incomes are sliding, farmers are rendered more vulnerable than ever. A combination of factors including high costs of reinsurance owing to erratic weather conditions, a spike in claims, political interference in crop loss estimation have driven some insurers to withdraw. Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched in June 2016 with the intention that any farmer who avails a loan will simultaneously sign up for insurance; any crop damage will be evaluated by state government officials; and the insurer would eventually pay out a compensation amount commensurate to the degree of yield loss. The reality, however, is that few farmers get compensation on time. As on 1 November, insurance companies owe farmers Rs 2,511 crore from the kharif 2018 crop season (that is 16 per cent of estimated claims). This amounts to a delay of more than a year from the date of harvest. For winter crops harvested in April-May of 2019, farmers are await another Rs 1,269 crore (that is 26 per cent of estimated claims). Enrolment under PMFBY fell from 40.5 million farmers in kharif 2016 to 34 million in 2018, a 16 per cent drop within two years. Such a trend is only a natural consequence of the prevailing situation. This leaves a big question about the fate of those farmers who suffered serious crop damage this year due to an erratic monsoon, which has led to in soaring onion prices. To a considerable extent, the government-led programme (which has cost nearly ₹1 trillion in premiums since 2016) intended to mitigate the risks faced by the farmers also stands questioned for its efficacy. Given the overall slow down of the economy, agriculture is the one sector that keeps the economy going. And now as farmers also stand deprived of the requisite partial relief of an insurance cover, it only indicates of bleaker times for of course agriculture and the over all macro economic situation. The farmers' distrust regarding the scheme has been firmed up further after four private insurers—ICICI Lombard General Insurance Co. Ltd, Tata AIG General Insurance Co. Ltd, Cholamandalam MS General Insurance Co. Ltd, and Shriram General Insurance Co. Ltd—did not bid for insurance clusters in the kharif 2019 crop season. It is obvious that the profit- motivated capitalist intentions of the private players clash with the welfare motive of support to the farmers.
While a range of genuine reasons may have prompted the insurance industry to withdraw, concerns like high costs of reinsurance owing to erratic weather, a spike in claims and political interference in crop loss estimation are also significant reasons compounding the problem. State governments spend a significant amount of their agriculture budget on the scheme but seem reluctant to pay their share of premium on time; under the scheme, farmers pay only 2 per cent of the premium while the rest is borne equally by the Centre and state governments. The case of Maharashtra alone throws up the figure of an estimated 10 million farmers that are affected. In addition to the woe of poor compensation payouts in July this year, Madhya Pradesh government went further to limit the maximum payout. To lower its financial outgo due to premiums, the state government reduced the sum assured by 25 per cent. Harda district is a case in point where farmers were entitled to a claim of Rs 35,000 for 100 per cent damage to their soya bean crop per hectare in 2018, which has now fallen to Rs 26,250 this year. With mounting economic pressure on the farmer and dwindling means to manage situations at their end, their trouble takes more dangerous forms and surface as mental health disorders. As Maharashtra leads the way with mental health plan to address rural distress under a mental health service scheme which was initiated in 2016, 46,542 farmers have been counselled in four years, and 11,304 hospitalised due to severe mental breakdown. Farmer suicide remains as much a grim reality as it has been. To make matters worse, and in repeatedly testing the resilience of the farmers, landless farmers get not benefits under PM-KISAN programme. In a reply to supplementary questions in Rajya Sabha, Minister of State for Agriculture and Farmers' Welfare Parshottam Rupala said that those working in allied sectors can also not be provided benefits by the Centre under the PM-KISAN scheme. The Centre gives income support to land-holding farmer families which have cultivable land and those working in allied sectors linked to agriculture, but landless labourers cannot be provided benefits by the Centre under this scheme. Further, Union Agriculture Minister Narendra Singh Tomar said that "Agriculture being a state subject, the state governments undertake implementation of programmes/schemes for development of the sector. Government of India supplements the efforts of the state governments through various schemes/programmes." In the debates and discussions at parliamentary level, what must not be missed is that there is an inevitable need for the Central and state governments to come together on the same page and devise agriculture-centric policies that will go a long way in both ameliorating the situation of the farmer and reviving the slumping Indian economy.