No Grievance Mechanism, First Claim By Bank Not Farmer. P Sainath explains how Modi’s Fasal Bima Yojana is a ‘Gigantic Scam’
The veteran journalist and social activist also said, “There is no dispute redressal mechanism worth the name.”
Journalist and veteran social activist P Sainath reiterated his claims that the Pradhan Mantri Fasal Bima Yojana (PMFBY) was a bigger scam than the Rafale Deal on Tuesday, November 13. Sainath pointed out how private insurance companies get away without spending their money on the insurance scheme and how farmers have lost out on insurance payouts despite having paid premiums.
Sainath said, “The much-vaunted PMFBY which has been tom-tommed to the sky by the media is a gigantic scam. If it continues for a few more years without change and in its present system, it is a bigger scam than the commission wrecked off on the Rafale deal.” Continuing further, Sainath added, “It’s more an insurance scheme for the banks and insurance companies. The scheme’s design ensures the siphoning off of over giant sums of public money to private corporations and to a couple of public insurers (in line for privatisation).”
Sainath also mentioned that farmers can only apply for bank loans in those districts where such insurance schemes are available. He said, “Firstly, you (a farmer) can only get a bank loan in those districts where these schemes prevail. If you (a farmer) sign up for the insurance, the premium will be automatically deducted from your (loan) amount.” But, it’s here that the loophole exists by which the farmer is exploited.
According to Sainath, “If there is a crop disaster and there is insurance payout, the first claim on the compensation amount will be on the bank that gave the loan and not the farmer.”
The Faulty Redressal System
Sainath, however, added that the biggest exploitation on the farmer came through by way of a poorly designed redressal mechanism that offers little to protect or help the farmers’ interests.
Note that the CAG report. No., 7 of 2017 also has several unpleasant observations to make about the PMFBY. Including its lack of a dispute redressal mechanism. It also observes a decline in the number of farmers opting for the scheme. #pmscropinsurancescheme
— P. Sainath (@PSainath_org) November 13, 2018
Sainath observed, “In the structure of this (insurance) scheme, where is the dispute Redressal mechanism? Several of these (insurance) companies which have got monopolies over these talukas in so many districts do not even have an office or an inspector or an examiner team at the taluka level.” Elaborating, he added, “So there is no dispute redressal mechanism worth the name. (There is) no serious mechanism for settling disputes where people feel that they have not been given compensation or been given extremely pathetic levels of compensation.”
Sainath went to the extent of emphasising that there was no way by which the state government could step in and provide dispute redressal to the affected farmers. Finally, concluding his observations, Sainath noted, “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.”