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Agriculture Insurance: Insurance Raised For Agriculture Sector

Finance Minister Arun Jaitley focussed his promises on helping farmers to access increased credit while farmers were disproportionately hit by demonetisation and he also said the government would channel more money for irrigation.

According to the Budget documents, allocations made to the Agriculture Ministry were ₹51,026 crore or about 6% over last year’s updated estimates. Chairman, Bharat Krishak Samaj, Ajay Vir Jhakkar said, “It is quite insipid, there is no relief or measures to ease the effects of demonetisation.”

Agriculture is forecast to grow at 4.1% in the current year on the back of a reasonable monsoon. The government would be focussed on keeping last year’s promise to double farmer income in five years, said Mr. Jaitley.

He said, “We have to take more steps and enable the farmers to increase their production and productivity; and to deal with post-harvest challenges.” A “record” according to Mr. Jaitley, the target for agricultural credit in 2017-18 was fixed at ₹10 lakh crore.

The Fasal Bima Yojana (FBY), or the Prime Minister’s farm insurance scheme has been extended to 40% in 2017-18, which covered 30% of cropped area in 2016-17 and is expected to cover half the country in 2018-19.

The Budget provided ₹5,500 crore for the scheme last February but to settle the arrear claims, increased it to ₹13,240 crore; for the scheme this year, ₹9,000 crore has been allotted.

Insurance companies have benefited from the FBY scheme, farmer groups allege that more than them. Farmer group, Swaraj Abhiyaan said, “Expenditure on premium increased to ₹13,240 crore but covered only 26.5% of farmers. All this money went to insurance companies. There is no mention of how much claims the farmers got in return.”

To improve the coverage and efficiency of irrigation services would double its corpus from ₹20,000 crore to ₹40,000 crore, NABARD set up a dedicated irrigation fund last year.

Source: http://www.thehindu.com