Need of an agri insurance regulator

The insurance scheme “Pradhan Mantri Fasal Bima Yojana (PMFBY)” insists that insurance firms offering agricultural insurance have to have offices at block levels, whereas, such penetration is non-existent in most cases. “Many problems associated with the growing agricultural insurance sector can be solved if there is a strong oversight body,” said a senior official with a public sector insurance company involved in agricultural insurance. Most empanelled companies are not sure of continuity in the same region as there is trend of annual contracts. “Currently, only Tamil Nadu and Madhya Pradesh have given a long-term contract of three years to crop insurance firms. Ideally, an insurance firm should be allowed to work in a region for three to five years. This will help them develop infrastructure,” the industry source said. Many states demand the inclusion of crop destruction by wild animals under the insurance scheme. Non-loanee farmers can take insurance cover for crops notified by the State governments, if applied through Common Services Centres. “Not just quantity of Crop Cutting Experiment, even quality is a serious issue. Most of the time such CCE is inefficiently carried out and at times they are plainly cooked up,” he said. “In many states, PMFBY is taking away a significant part of the State agriculture budget,” the CSE report said. In Madhya Pradesh, for instance, the expected premium subsidy was RS.1, 485 crores, which is 60 % of its total agriculture budget of Rs. 2,448 crores in 2016-17. Certain districts in Karnataka have had claims that are several-fold higher than the premium they paid. Claims in Mandya, for example, were 630 % of total premiums paid; Chitradurga was 408 % and Mysuru, 406 per cent. Similarly, in Tamil Nadu, the claims are higher than premium collected in virtually all the districts, the Centre’s statement said.