Claims settlement in PMFBY eased with timely deposit of subsidy

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The center announced on Friday that it had unlinked its share of the premiums from the states contribution under the Crop Insurance Scheme to settle claims faster as farmers were struggling despite having paid their share of the premiums at the time of registration.

Under Chief Minister Vasal Pema Yojana (PMFBY), farmers pay 2 percent of the sum insured as premium in Khareef season, 1.5 percent in Rabi and 5 percent for cash crops in both seasons. The amount of the remaining insurance premium, derived after tendering of different crops in different groups, is shared in 50:50 by the Center and the States.

Addressing an event to launch a separate portal and mobile app, Agriculture Minister Narendra Singh Tomar said farmers were waiting for claims to be paid for a long time through no fault of their own despite having paid their share of premiums. “We have now determined that the center will pay its share in due course, even if it is delayed by states, so that the claims can be settled, either in whole or in part,” Tomar said.

Since the states were defaulting on paying their share of the insurance premium subsidy, the center did not release its share.

Last year, the Center discussed a proposal for states and the Center to build a pool where a part of the annuity support could be deposited in the form of a bank guarantee and in case of default, the amount of BG could be disbursed. However, many states opposed the proposal, and eventually it was shelved.

Tomar has also officially released a mobile application called AIDE, which will help brokers register farmers under the PMFBY as until now registration was only allowed through banks or Shared Service Centers (CSCs).

This year, 30,441 applications have already been registered through the APP since July 1 covering 22,762 hectares in 6 states by 11 insurance companies, according to Ritesh Chauhan, CEO of PMFBY.

This (AIDE) is a collaboration brought about by the United Nations Development Program and Absolute. Since both banks and CSCs are brick-and-mortar channels, the grower has to actually visit them to register, whereas insurance is traditionally sold through intermediary channels. “It was lacking within the PMFBY ecosystem,” Chauhan said.

Since the digital platform helps with doorstep registration, he said only those IRDA-approved brokers will visit and register farms. It will be paperless with SMS and WhatsApp integration for error-free data entry.

Officials said that due to the adoption and integration of the technology into PMFBY, the amount of the insurance premium in the bid this year has fallen to less than 10 percent of the insurance amount where it was 14-15 percent in previous seasons.

The government also unveiled guidelines on YES-TECH, a technology-based yield estimation system. It is basically an automation of crop yield estimation, Chauhan said, based on remote sensing and other technologies. The Ministry of Agriculture collaborated with ICAR and ISRO to develop protocols.

He added that after two years of pilot studies, these estimation models were standardized under the Mahalanobis National Crop Forecasting Center.

The government also launched the WINDS portal to collect and disseminate weather data and other related data to farmers.

For ₹29,598.43 crore premium collected by the insurers, the total claim paid was ₹17,881.43 crore in 2021-22. Although the claim for 2022-23 is not finalized yet, on July 20 it was INR 5,760.80 crore for a total premium of Rs 27,900.78 crore, Tomar said in a written reply in the Rajya Sabha.