Expectation of loan waiver causes farmers to stop payment against existing loans. They don’t buy insurance for the next season
The Centre launched the Pradhan Mantri Fasal Bima Yojana (PMFBY) in January 2016. While crop insurance programmes in Indiahave been in place for more than four decades, interest among farmers about insuring their crops has been low, which is reflected in the modest coverage level.
According to latest data from NSSO, less than 10 per cent farmers insured their crops in the 2012-13 cropping year. With the launch of PMFBY, the government has bringing in 50 per cent of the cropping area under crop insurance. Budget allocation towards this scheme has increased substantially, and now covers as much as a third of the total budget of the department of agriculture.
There was a noticeably sharp increase in crop insurance penetration immediately after the introduction of PMBY. The Chart shows coverage of crop insurance by percentage of farmers insured over the years, from 2000-01 to 2017-18. While around 30 million farmers in the country insured their crops in 2015-16, this number jumped to around 57 million in 2015-16, a 90 per cent increase in coverage. This is the highest year-to-year increase in the history of the crop insurance schemes in India.
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