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84 lakh Farmers Have Withdrawn From Pradhan Mantri Fasal Bima Yojana;  Pvt Insurance Companies’ Profits Rise: RTI

Of these 84 lakh farmers, 68.31 lakh were from the BJP-ruled states of Rajasthan, Maharashtra, U.P. and M.P.

Over 84 lakh farmers who had purchased insurance cover under the Pradhan Mantri Fasal Bima Yojana (PMFBY) withdrew from the scheme in 2017-18, an Right To Information (RTI) query has revealed. This figure represents about 15 per cent of the total farmers who had bought the insurance cover under the PMFBY in 2016-18.

The RTI also revealed that under the insurance scheme – which is mandatory for all farmers seeking a loan under the PMFBY – private insurance companies’ profits increased significantly since the scheme was launched in 2016.

According to the reply to the RTI filed by activist P.P. Kapoor, the Hindu reported that around 68.31 lakh farmers who did not continue with the insurance scheme were from Maharashtra, Rajasthan, Madhya Pradesh and Uttar Pradesh, all of which are ruled by the Bharatiya Janata Party (BJP).

Withdrawals from PMFBY in 2017-18

According to the RTI reply, 5,72,17,159 farmers had enrolled for the insurance scheme in 2016-17. Of these, 4,35,52,715 farmers were those who had also applied for a loan under the PMFBY while the remaining 1,36,64,444 had not applied for a loan.

In 2017-18, the total number of farmers who opted for the insurance scheme dropped down to 4,87,70,515. This included 3,51,36,128 farmers who went for a loan while the remaining 1,36,34,387 were those who did not take up the loan, their numbers remaining almost the same as that in 2016.

In the four states (Maharashtra, Rajasthan, U.P., M.P.) where the withdrawals of farmers has been concentrated, Rajasthan has seen the highest number of farmers opting out — 31,25,025. This is followed by Maharashtra with 19,46,992, U.P. and M.P. follow with 14,69,052 and 2,90,312 withdrawals respectively.

Pradhan Mantri Fasal Bima Yojana 2016-17 2017-18
Loanee farmers 4,35,52,715 3,51,36,128
Non-loanee farmers 1,36,64,444 1,36,34,387
No. of farmers insured 5,72,17,159 4,87,70,515
Gross premium ₹22,36,211.08 ₹25,04,587.20
Estimated claims ₹16,44,855.77 ₹17,99,254.41
Approved claims ₹16,24,270.97 ₹16,61,116.39
Claims paid ₹15,90,247.23 ₹15,71,025.50
No. of farmers against paid claims 3,01,26,403 12,601,048

(This does not include the Rabi crop insurance estimates for 2017-18)

Also Read: Modi Govt’s Fasal Bima Yojana a Bigger Scam than Rafale, Benefits Reliance Insurance: P. Sainath

Insurance scheme for farmers or a massive profit-making opportunity for private companies?

The total profits of the four insurance companies in the scheme — ICICI, Reliance, IFFCO and HDFC — the total profit came to around Rs. 15,675 crores in these two years (the figure might change after Rabi claims are estimated). In 2016-17, the companies’ profits stood at around Rs 6,459 crores.

PP Kapoor, the Haryana-based activist who had filed the RTI, told The Hindu that the scheme was not helping farmers at all. Calling it a ‘fiasco’, Kapoor said that the farmers would have been helped in a better manner had the government not channelled the insurance scheme through such insurance companies.

Kapoor’s findings echo those of social activist P Sainath who had also termed the scheme a ‘scam’ that benefits private companies. Pointing out that PMFBY had no grievance redressal mechanism for farmers whose claims had been denied, Sainath had said, “In every way this scheme is skewed against the farmer. It is going to take hell of a lot of money out of the farmers. (But) it is not going to benefit the farmer in any way. It’s going to harm the farmer. It’s another way of looting the farmer.”

Also Read:No Grievance Mechanism, First Claim By Bank Not Farmer. P Sainath explains how Modi’s Fasal Bima Yojana is a ‘Gigantic Scam’

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