News Non-Life29 Mar 2018

India:Govt-backed crop insurance scheme loses sheen

29 Mar 2018

India's crop insurance programme, launched two years ago, is seeing negative growth for the current financial year ending 31 March 2018 (FY2018). Its coverage area has fallen to 24% the gross cropped area (GCA) from 30% last year.

The target for the programme, Pradhan Mantri Fasal Bima Yojani (PMFBY), for FY2018 was 40% coverage. The total GCA which is estimated to be about 198.4 million hectares.

The shrinking coverage size means a considerable challenge for the programme as a whole, reports the Indo-Asian News Service.

The government has been aiming for a targeted coverage of 98 million hectares of the GCA or 50%. by FY2019. With the current negative growth rate, reaching this goal appears unlikely.

The PMFBY has also witnessed a 14% drop in the number of farmers insured to 47.9 million in FY2018 from 55.3 million in FY2017. A state Agriculture Secretary said farmers had lost interest in the scheme because compensation was either denied or delayed, besides flaws in estimating crop output.

Under the PMFBY, farmers are required to pay only 2% of the total premium for the kharif (monsoon) crop. Growers need only pay 1.5% the total premium for the rabi (winter) crop. Horticulture farmers must pay 5% of the insurance premium.

Crop insurance business, driven by the PMFBY, saw a 288% growth in premiums for FY2017 to INR20,611 crore (US$3.2 billion), contributing significantly to growth of non-life business last fiscal year.

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