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Home / Chandigarh / Rejecting centre's crop insurance scheme, Punjab seeks state-specific plan

Rejecting centre's crop insurance scheme, Punjab seeks state-specific plan

Terming it as "not suiting" Punjab, the state government has rejected the Centre's draft crop insurance scheme.

chandigarh Updated: Mar 09, 2015, 07:48 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times

Terming it as "not suiting" Punjab, the state government has rejected the Centre's draft crop insurance scheme. In a recent meeting with top officials from the union agriculture ministry, state officials said the scheme should insure individual farmers instead of large farm lands.

Experts have demanded that the policy should have provisions for compensating Punjab farmers for the higher input cost incurred to save the crop due to natural calamities, instead of waiting for damages to increase up to 70%.

"The clause of indemnity level of 70% is not suited to Punjab, because the state has never notified a calamity year in the past 15 years. The variation in yield of major crops has been much less over these years, up to 23% in case of cotton, negligible 5% in case of paddy and there is no decline reported in wheat and maize crops," state officials have told their counterparts in the union agriculture ministry.

It was also pointed out that as 98% of the cropped area is under irrigation, crop losses due to drought were unlikely, even as this leads to an increase in the input cost as tubewells are pushed into use for irrigation.

"Normally, in case of calamity years the cost of irrigation for farmers increases due to increases in cost of irrigation, labour and other inputs. The draft scheme doesn't compensate for such increases," said Punjab's communiqué to the centre during the meeting.

A meeting of national group ministers and secretaries is scheduled in March-end. The state government is preparing a presentation to bring home the point that the dynamics of agriculture in Punjab is different from rest of the country and the policy needs to be state-specific.

Financial commissioner incharge of the state agriculture department Suresh Kumar has suggested that the policy needs to be farm and farmer specific, and must not involve the village or the block. Sometimes in a natural calamity, one portion of village land was affected and there were chances that the area nearby remains undamaged, he said.

'Premium at 10% too high'

"The insurance premium also needs to be made affordable, which now stands at 10% of the total crop value. This needs to be between 5% and 6% with 50% subsidy," he said.

The crop value according to the policy, for major crops is to be accessed at village level and block or district level assessment for minor crops. Farm experts in Punjab said the premium for crop insurance as per the policy is much higher than the expected compensation state farmers could ever receive.

"States should be given broad guidelines and they must be allowed to frame a policy as per local requirement and invite bids from insurance companies," Kumar added.

National Agriculture Insurance Company (NAIC), under the agriculture ministry, is authorised to undertake crop insurance across the country and earned Rs 378 crore profit in the last financial year. The centre has kept a budgetary provision of Rs 2,823 crore for crop insurance in 2015-16 budget.

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