Modi’s gambit to woo farmers shouldn’t come a cropper
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Modi’s gambit to woo farmers shouldn’t come a cropper

The crop insurance plan promises a tech-friendly package and higher risk-sharing by the government.

editorials Updated: Jan 20, 2016 01:48 IST
Hindustan Times
Narendra Modi,Farmer schemes,Crop insurance plan
Gangtok: Prime Minister Narendra Modi addresses the plenary session of National Conference on Sustainable Agriculture & Farmers Welfare, in Gangtok on Monday. PTI Photo (PTI1_18_2016_000276B)(PTI)

Faster. Better. Cheaper. The magic three words that are seen as a sign of strength in business seem to have entered the lexicon of moribund agricultural insurance in India with the Pradhan Mantri Fasal Bima Yojana approved by the cabinet last week. The scheme, which subsumes two current ones, has many ingredients that look promising. However, given the size of India’s farm sector, in which an estimated 119 million cultivators battle the elements in a monsoon-dependent economy, we have to see how it fares at the ground level. True to his style, Prime Minister Narendra Modi’s scheme will bring in smartphones to capture and upload crop-cutting data to estimate losses, involve private insurance companies and use the increasingly popular direct benefit transfer (DBT) method to put money directly into the accounts of suffering farmers. That is good news in a land that has seen farmer suicides and agrarian distress.

One hopes all this will cut down insurance frauds. Packaging apart, the real benefits lie in increased risk-sharing by the government. The scheme, which kicks off with the next summer crop, is expected to cover half of India’s cropped area over the next three years, more than double the current level (India’s cropped area is now about 195 million hectares). Budgetary allocation to subsidise crop insurance will be increased to Rs 7,750 crore in 2018-19 from Rs 2,823 crore in the current year. There is no cap on the subsidy on premiums, which has hitherto restricted compensation to a fraction of incurred losses. Farmers will now pay only 2% of the insured amount against the current 2.5-3.5% for kharif (summer) crops and continue to pay 1.5% for rabi (winter) crops. In sum, the new scheme aims for higher subsidies, wider coverage and efficient delivery.

But some issues may loom on risk measurement in an activity that is vulnerable to climate change, a new global threat. Also, more subsidies essentially put the tab on the taxpayer’s account. Can we look at adding some of India’s famous expertise in information technology and the emerging field of analytics to sharpen risk measurement? Mr Modi’s gambit to woo farmers as vital state elections loom could also do with more of his love for technology.

First Published: Jan 19, 2016 21:33 IST