Seed firms to pay just 1,300cr as compensation for crop loss to Maharashtra cotton farmers

Soon after the pest attack, the Maharashtra government announced a compensation of Rs 30,800 a hectare to the affected farmers in a region already reeling under an agrarian crisis. Of this, Rs 16,000 a hectare was to to be paid by seed companies under the Maharashtra Cotton Seeds Act.

The state government may not be able to raise the financial compensation that it promised to cotton farmers in Vidarbha and Marathwada who had lost more than half their standing crop to a pink bollworm attack eight months ago.

A cotton farm in Maharashtra’s Amravati. Cotton farmers in the state’s Vidharbha and Marathwada regions lost more than half their standing crop to a pink bollworm attack. (Anshuman Poyrekar/HT File Photo)

This is not only because fewer farmers applied for the compensation, but also because the seed companies — which were expected to contribute Rs 16,000 per hectare as compensation to the 40 lakh affected farmers — said they were not liable to pay as much as many of the farmers had not followed proper pest management plans to protect their crops.

Soon after the pest attack, the Maharashtra government announced a compensation of Rs 30,800 a hectare to the affected farmers in a region already reeling under an agrarian crisis. The state had planned to collect this amount from three sources — Rs 6,800 a hectare from the National Disaster Relief Fund, Rs 8,000 a hectare from crop insurance firms and Rs 16,000 a hectare from seed companies under the Maharashtra Cotton Seeds Act. That translates to Rs 6,000 crore that the state government expected to raise from seed companies alone. However, claims only to the tune of Rs 1,300 crore, for the loss of cotton crop on just 11 lakh hectares, have been raised so far.

While all 40 lakh farmers received compensation from the NDRF, only a fourth, or 14.50 lakh farmers, applied for compensation from seed companies.

There are at least 40 companies selling seeds in every district, and each of them was represented at these hearings. The claims finalised in the four districts amounts to Rs 140 crore, and total claims are expected to touch Rs 1,300 crore, sources in agriculture department said.

“The total should have been more than Rs 2,200 crore, but the seed companies have been contending that farmers do not follow the integrated pest management plan, and that the losses are just 5% to 10% of last year’s production,” said an officer from the department.

Officials said the seed companies often challenge the state’s orders. “The companies always move court, challenging our orders, saying the farmers do not follow instructions on the seed packets,” another official said. “In some cases, the compensation slapped is more than the firms’ annual turnover.”

Experts and farmers’ activists agreed. “I don’t think these claims will be accepted by the seed companies, as they cite the lack of awareness among farmers about the pest attack,” said farm activist Vijay Jawandhia. “Instead of waiting for the compensation from companies, the government should first pay it to the farmers. He said only a-fourth of the cotton farmers applied for the compensation as they did not have awareness about the provision in the first place.

Bijay Kumar, additional chief secretary, agriculture department said, “The compensation is being claimed based on applications and depending on the loss assessed from the crop cutting system. While giving the compensation under NDRF norms, the government is more liberal, but the compensation is claimed more scientifically from the companies. Even if the companies move court against the orders, we are sure to win them in the court.”