The Failure of the Crop Insurance Scheme

A farmer somewhere in North India committed a suicide recently, because of the bad rains and the losses incurred. The unusual rains in the past two months would have made all of us happy and feel good because of the atmosphere but farmers had their night mare come true. Wheat cultivation especially was damaged tremendously.

Why are we talking about all this?? Reason being the focus on the “Crop Insurance Scheme” by the GOI and NABARD to supplement the farmer when he incurs a loss of because of adverse environment conditions. Is the scheme as efficient as it is on paper?? Not at all. 

The reason for suicides are definitely something more than just “rains”. One of the major ones being the worst failure of the crop insurance scheme and corruption in the system.

For example, if a farmer incurs a loss of 5000/- which is covered under his crop insurance( for which the farmer has to pay additional amount in the form of increased EMI) then he has to go to the insurance company and claim his losses. Now supposedly these lazy insurance officials take a pathetically long time of 6 months to settle a simple claim?? and worst of all is banks start sending notices to farmers that “we will auction your land”. How the hell is he supposed to pay you if his claim is not settled?? Then what is the difference between a money-lender and a bank (the so-called formal financial institution). He hardly has any savings of his own. Trust me if he had a lot of savings he would have managed without these stupid institutions who just claim to be helping the “agricultural sector to revive”. .

Of course there are some states which are efficient in their working for the same but, few states (not to name them) are just not efficient enough. This is having an intense impact on credit percentage reducing with years because if this is the way so-called strong banking sector is going to work then I don’t see any difference from a normal informal money lenders.

In some cases, a farmer was made to wait for a loan of 25000/- for a bribe of 300 bucks. Can you believe it? I just can’t visualize something like that and brings out a lot of rage against the system. This delay compels them to go the informal way and then get exploited by the money lenders.

Union Govt has although responded to this agricultural crisis with its following measures:

  1. Farmers who suffered 33 % crop damage were made eligible for input subsidy
  2. The input subsidy was also increased by 50%

The Govt has also instructed the insurance companies to settle such claims within 45 days which is far from reality. I feel all these changes are only going to show signs of changes if reducing corruption is taken as a top priority issue. We the common people are anyways getting used to such harassed practices but at least leave the farmers who are creating a source of living for each one of us. Don’t make them go through the ugly truth of the system is all I can . 🙂

Thank you.