Pradhan Mantri Fasal Bima Yojana: Punjab set to adopt centre’s crop insurance scheme


Seven years after it was launched by the Centre as one of its flagship schemes to provide insurance cover to the farmers for their crops across the country, the Aam Aadmi Party (AAP) government in Punjab is working on the options to adopt Pradhan Mantri Fasal Bima Yojana (PMFBY).

The state government has set a deadline to adopt the scheme from kharif (wheat) sowing of 2024 which takes place in the month of June-July.

The scheme partly sponsored by centre was launched countrywide in 2016 but the then SAD-BJP government in Punjab rejected it for its parameters and conditions not suiting the state farmers and a cause of additional burden on them for the premium to be paid. The state peasantry also built pressure on the state government against adoption of the scheme.

Later during the Congress party regime, it was proposed to start a state level crop insurance scheme but it couldn’t take off.

“We are studying the scheme as to how it could be tweaked and made beneficial for the state farmers,” said a top official in the state agriculture directorate, adding that state government is serious to adopt it, after losses of the cash crop cotton, wheat and premium variety basmati paddy during the last two years.

The Centre is pushing the state to adopt the scheme to cut the expenditure of disaster relief funds from paying compensation for loss to the crop. The states such as Telangana, Gujarat and Bihar which had rejected the scheme at the onset have adopted it.

What catalysed the decision of AAP government in the state to adopt the scheme is 700 crore compensation paid to the farmers for loss to cotton crop during past two seasons. In last year wheat yield fell by 15% leading to heavy loses to the farmers owing to sudden rise in temperature at the maturing of the crop. Before that basmati also suffered heavy losses. Total losses in agriculture sector were pegged to 1,500 crores.

The officer added that efforts are made to bring down the area of one unit to get the insurance cover which now is an administrative block. Punjab has 166 blocks. “We are trying to keep it to village level, but for that we need to hire more staff,” said agriculture director Gurvinder Singh. He added that to access loss in a block atleast ten crop cutting experiments are to be done of each crop sown in the area and for a village a unit four crop cutting experiments are required as per to known the loss.

There are 13,004 village panchayats in the state and it is to be seen how many are actually engaged in farming as some of the panchayats are semi-urban and the land has residential colonies.

Chief Secretary Punjab VK Janjua said that the state government is keen to take up the scheme and would like it to be tweaked as per the needs of state farmers. “We are holding discussions at different levels and would soon send a proposal to the Centre,” he added.


Rejecting the proposal, the president of Rajewal faction of Bharatiya Kisan Union, Balbir Singh Rajewal saidthe scheme in its present form would do not good to the state farmers. He added that once adopted farmers would be forced to adopt it for the reason that peasantry with landholdings in one unit has to pay premium than the scheme would be successful. “Even if the government brings down unit of the area to village level the scheme is not practical for the reason that sometimes due to bad weather conditions – such as hailstorm, rainfall or flooding, two adjacent farms are left with different impact on the crop.

“The (agriculture) department is making best efforts to make the insurance scheme suit Punjab farmers,” said Gurvinder Singh. According to him a four-member department team was sent to the Karnataka where the scheme has shown good results, adding that feedback is also being taken from the states such as Maharashtra, Chhattisgarh and Haryana where the scheme is running since the past years.


As per reports the state government is ready to contribute 500 crores annually and as per the PMFBY scheme, the Centre will contribute same amount and 200 crores by the farmers. “As per our initial estimation within this amount we tend to cover 40% of the crop sown area in the state under insurance cover,” said a senior official in the state agriculture department. Atleast 40 lakh hectares (100 lakh acres) is under crop cultivation in Punjab.


The premium to be charged from the farmers depends on the input cost or the productivity value, fixed by the Punjab Agricultural University (PAU). “So far we have not received any information from the state government over adoption of the scheme, we would like to contribute to the new proposal,” said PAU Vice Chancellor Dr S.S. Gosal.

Gosal added that as per studies done earlier, a conclusion was reached that the scheme was suited to states like Bihar and Uttar Pradesh and other eastern states. It is better if the Government of India allows us to tweak the scheme as per our requirement, he pointed.

The department officials said that premium for insurance scheme ranges from 1.5% incase of wheat, 2% for paddy and 5% for the cash crops such as cotton. “We want the Centre to allow increase in the indemnity value of the insurance cover. For the reason that In Punjab loss is 10-15% so we want out farmers to be compensated for that,” adds Gurvinder Singh. The state government would also negotiate with the insurance companies at the final stage, he further said.

According to Devinder Sharma, a food policy analyst, it is good incase the scheme is re-oriented as per the needs of Punjab farmers. “The per unit area needs to be reworked, why block or a village level why not an individual farm. Technology is so advanced that every single inch of land could be scanned,” he suggested. He also said that Punjab has assured irrigation and chances of loss due to drought is negligible in in the state. “We need to focus on compensation for loss due to natural calamity,” he added.

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