Back in 1999, the government introduced the National Agriculture Insurance Scheme (NAIS) or the Rashtriya Krishi Bima Yojana (RKBY) to ensure coverage to farmer’s loans and crops.
The scheme did not get off to a good start, lying dormant for a long time and later on being
selectively employed to cater to the political motivations of some politicians. Said Bharatsinh Zala.
Not much seems to have changed today with the Prime Minister Fasal Bima Yojana
(PMFBY). Envisioned to help farmers circumvent their crop failure losses and ensure crop
insurance, both State and Central Governments, as well as the many insurance companies
seem to be failing the countries farmers yet again and the gaping hole that is the missing
agriculture policy in India only seems to be getting bigger.
According to the PMFBY—created in 2016 by the NDA government—from the total crop
loan taken by farmers, a 5% premium is given to the insurance companies; 53% is given by
Central & State Governments.
In Gujarat, in 2017, INR 1392.70 Crore was paid to insurance companies—respectively—by
both State and Central Government, along with the 5% premium paid by around 19 lakh
farmers. Owing to massive floods in parts of Gujarat, farmers faced terrible crop losses and in
spite of their ‘protection’ under the scheme, only around 3 lakh farmers received
compensation of INR 1042 Crores.
Similarly, in 2018, Bima Companies received INR 1992 crores each from the Centre and
State Governments respectively along with 5% premium paid by around 21 lakh farmers who
took loans. Out of this, only around 1 lakh farmers received 135 crores in compensations.
The dreaded combination of this anti-farmer policy, the natural disaster calamities faced by
farmers, the many—high—expenses borne by farmers—for seeds, pesticides, weedicides,
machinery; to name a few—and the almost negligible return of income that farmers have to
bear has resulted in the sad state of affairs amongst farmers having to take care of their
families in the state of Gujarat and many have found no other alternative than to take their
In the Supreme Court of India, Civil Appellate Jurisdiction, according to the Special Leave
Petition (C) No 29910 of 2014: CRANTI versus State of Gujarat & others, the Supreme
Court order ratifies that all those farmers who take crop loans are assured under the PMFBY
from Kharif Season 2016 to receive crop insurance that covers their cost of production. But,
in 2017, owing to drought, they have not received crop loan waivers or insurance from Bima
Companies. In 2018, 49 Talukas were declared drought afflicted by the State Government
owing to total crop failure. Each farmer had to spend INR 1700 per hectare—not including
the labour costs endured. In these trying times, without crop loan waiver, insurance
protection, basic flood relief support and with impending total crop failure how will farmers
survive the challenges of the upcoming year?
The State and Central Government currently give INR 6000 per every two hectares. This
menial amount will not be sufficient to compensate the amount spent in buying seeds.
In order to help farmers, the Supreme Court of India has ordered the Government of India,
State of Gujarat, the RBI and other States to come up with a strong agriculture policy. In spite
of this order, no policies have been created so far. The Government must look into this crisis
immediately and forego crop loans, provide crop insurance to farmers and work on a holistic
agriculture policy at the earliest. Association with Bima Companies must be reduced to the
We appeal to the State and Central Governments and the Bima Companies who believe in
transparency and Right to Information to reveal how much money in premium they have
received from the government, farmers and tell us all how much money was given back to
farmers as insurance.
Attached below is a list of 18 Bima Companies who are complicit in this agrarian crisis:
1. IPCO Tokyo General Insurance Company Ltd.
2. ICICI Lombard General Insurance Company Ltd.
3. HDFC – ERGO General Insurance Company Ltd.
4. CHOLAMANDALAM General Insurance Company Ltd.
5. TATA AIG General Insurance Company Ltd.
6. Future Janrali General Insurance Company Ltd.
7. Agriculture Insurance Company of India Ltd.
8. Reliance General Insurance Company Ltd.
9. Bajaj ALLIANZ General Insurance Company Ltd.
10. SBI General Insurance Company Ltd.
11. Shriram General Insurance Company Ltd.
12. United India General Insurance Company Ltd.
13. UNIVERSAL SOMPO General Insurance Company Ltd.
14. National Insurance Company Ltd.
15. Oriental Insurance Company Ltd.
16. New India General Insurance Company Ltd.
17. Royal Sundaram General Insurance Company Ltd.
18. Bharti AXA General Insurance Company Ltd.