Farmers with up to two hectares of land became the first to insure their harvest under the Pradhan Mantri Fasal Bima Yojana (PMFBY). Technically called small farmers, they emerged as the largest group opting for the program across the country ahead of marginal farmers (cultivators owning up to or less than one hectare of land).
The crop insurance scheme has proven to be a lifeline for farmers due to the constant risk of erratic weather conditions they face. Farmers join the program by paying a small portion of the premium to the state, and the Center pays most of the premium.
In case of crop loss, insurance companies compensate the farmer to compensate for his financial loss. Currently, the scheme is optional for loaned and non-loaned farmers. Thus, a Maharashtra soybean farmer can claim compensation up to Rs 57,267 per hectare by paying a premium of only Rs 1,145.35.
An analysis of 2022-23 Kharif crop data by The Indian Express shows that an overwhelming number of smallholder farmers are opting for the scheme. The percentage of marginal and large owners is comparatively less. According to the definition, cultivators with less than one hectare of land are classified as marginal farmers while those with up to two hectares are called small farmers.
Despite being the largest landowners in the country, enrollment of marginal farmers lags far behind that of small farmers in the program, providing a comfortable cushion against economic loss. For agriculturally important states like Maharashtra, only 10.14% of enrollments came from marginal farmers, while 83.12% of enrollments came from small farmers.
In Madhya Pradesh, 14.53% of marginal farmers opted for PMFBY compared to 52.34% for smallholders. Rajasthan recorded 20.27% of marginal farmers opting for the central scheme while 49.83% of smallholder farmers opted for the same. In Uttar Pradesh, the program saw the participation of 32.23% marginal farmers and 59.21% smallholders. In Odisha, the figures stood at 16.29% and 78.79%, respectively. Other states also showed a similar trend.
Sangeeta Shroff, Professor and Head of the Agricultural Economics Research Center at the Pune-based Gokhale Institute of Policy and Economics, pointed out that farmers, who see risks in their crops, opt for insurance coverage. .
“For example, farmers in Marathwada and Vidarbha, who grow cotton and soybeans, are more enthusiastic about insuring their crops than paddy farmers in Konkan. The former see more risk from natural conditions and so the insurance cover helps them cushion their losses,” she said.
The crop insurance scheme has been the subject of sustained criticism from farmers and political leaders.
Political party leaders have called for reforms while states like Gujarat have even pulled out of the program.
In this season of Kharif, 19 out of 34 states are implementing this program while others are doing so on their own. Even Maharashtra has changed the system to ensure that insurance companies refund part of the premium collected in case compensation is not paid up to a certain fixed threshold.
Situated at the base of the land pyramids, marginal farmers are the hardest hit in the event of economic loss, so their take-up of crop insurance is low, experts say.
Ajit Nawale, Secretary of State of All-India Kisan Sabha – the farmers’ wing of CPI(M), said: “Marginal farmers being at the bottom of the economic ladder often fail to raise enough capital to finance their needs for seeds, fertilizers, etc. , it is natural that they also do not subscribe to the insurance.
“Since the scheme became optional, more and more farmers are opting out. States like Gujarat have even opted out of the program. Yoga needs to be rethought,” he said.