Over 2 lakh farmers wait for insurance as Rajasthan government falters on premium
For each notified crop in the insurance units, it is mandatory for the banks to insure all the borrowers under the PMFBY scheme. Farmers seek crop loan from financial institutions, such as cooperative banks, cooperative societies, regional rural banks, commercial banks and land development banks.Updated: Jul 17, 2019 12:41 IST
More than two lakh farmers of Bikaner district holding Kisan Credit Card (KCC) have been denied insurance claim for three crop seasons allegedly because Rajasthan and Union governments didn’t pay the subsidy (premium).
After the crop cutting experiments (CCES) data revealed that the district has suffered yield losses, farmers are eligible for insurance cover available under the Prime Minister Fasal Bima Yojana (PMFBY).
For each notified crop in the insurance units, it is mandatory for the banks to insure all the borrowers under the PMFBY scheme. Farmers seek crop loan from financial institutions, such as cooperative banks, cooperative societies, regional rural banks, commercial banks and land development banks.
Farmers’ premiums are collected from their KCC accounts.
According to data accessed by HT, 63,211 farmers of Bikaner district paid their premium for the 2017-18 rabi season with Rs 35510.51 lakh sum assured. Rajasthan’s commissioner, agriculture, Om Prakash said the government has paid its full subsidy for the 2017-18 rabi period and now it’s duty of the insurance company to settle the insurance claims of farmers.
Replying to an email query, Ashish Agarwal, head of agriculture business of Bajaj Allianz General Insurance, said that as per norms of IRDAI (Insurance Regulatory and Development Authority), an insurance company can pay the claims only after receipt of the entire premium.
In crop insurance, premium subsidy is being paid to the company by both the state and central governments as per scheme guidelines.
“We received minor subsidy amount from the state government and claims pertaining to this subsidy have already been disbursed. Major contribution of subsidy for Rajasthan for 20172018 rabi season are yet to be paid to Bajaj Allianz General Insurance,” he added.
For the 2018 kharif crop season, 99,867 farmers of Bikaner district paid their premium and HDFC ERGO assured a sum of Rs 72801.59 lakh in case of any crop loss.
When the matter came to light, the farmers staged a protest last week under the banner of the Bhartiya Kisan Sangh to compel the insurance companies to pay the insurance claims to the farmers.
Delay in paying the premium or making no attempt to pay it to the insurance company point at a bigger issue with the PMFBY guidelines pertaining to premium submission.
Commissioner (agriculture) Om Prakash said the department has paid a part of the premium recently to HDFC ERGO for the period and the rest will be paid soon.
HDFC ERGO refused to respond on the questionnaire sent through email.
As mandated by the Rajasthan government’s notification (dated July 31, 2017) for the kharif season, the last date for submission of premium in insurance company’s account through RTGS/NEFT was August 31, 2017. Not paying the premium to the insurance company on the scheduled date makes them free of any liability.
Shambu Singh Rathore of Bhartiya Kisan Sangh alleged, “The last date for premium submission to the insurance company is generally in the last week of August, when the pattern of rainfall could be well judged and it could be predicted if the yield would be a loss or not.”
He added, “When the insurance companies get a fair idea that the crop yield would be adversely affected in an area, they collude with the banks to avoid creation of insurance policies for the farmers. However, farmers insured for the 2018-19 rabi season are also running from pillar to post to get their claims settled. 73920 farmers of 8 tehsils in Bikaner paid a premium of Rs 9 crore 49 lakh 76 thousand 150 to insure 1 lakh 56 thousand 208 Hectare area with Tata AIG.”
The insurance company has withheld all claims made by farmers for the crop losses during the season. Tata AIG district cordinator Dhiraj Gupta said, “We are waiting for the government’s share of the premium and as soon we get the subsidy amount, we will start the process of disbursing the claims.”