Insurance Cos to pay heavy compensation to farmers

Farmers in Maharashtra are likely to receive heavy compensation as from crops damaged due to dry weather in June and floods in September. The outgo may be over Rs 10,000 crore, agriculture ministry officials said. Total claims for this year’s kharif, season are estimated to be about Rs 18,000 crore, which is close to the previous fiscals’ approved claims of a little over Rs 19,000 crore, which included the winter crop also, a government official said. Payment for damaged rice, cotton, oilseeds, pulses, sugarcane and horticulture crops will be paid under the Pradhan Mantri Fasal Bima Yoja (PMFBY) launched in 2016 in which a farmer contributes only 1.5% to 2% of the insurance cost and the balance is shared by the Centre and states. Beside Maharashtra, officials have estimated payout of Rs 4,000 crore in Madhya Pradesh, and Rs 1,000 crore to Rs 1,200 crore each in Karnataka and Andhra Pradesh. “Surveys for the assessment of losses are on in these states. Preliminary surveys have indicated large scale of damages and huge estimated payouts. The picture will become clearer when claims settle by February-end. Insurance companies will have to take a major hit,” said a senior agriculture ministry official. “This year, we have paid a premium of over Rs 20,000 crore for the risk cover of crops worth Rs 1.3 lakh crore. As per the estimations of the quantum of crop losses, we expect a claim payment of over Rs 18,000 crore,” the official added.