Journalism of Courage
Shiv Sena chief Uddhav Thackeray has threatened to shut the shops of insurance companies for not paying farmers’ crop loss claims under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
The Union Agriculture Ministry’s own data, based on a Parliament question reply on June 21, shows that insurance firms have approved only Rs 9,473 crore out of the Rs 13,471.44 crore estimated claims made for the 2018 kharif season. Further, actual claims paid so far are just Rs 8,540.11 crore. This, despite more than 7-8 months after the bulk of last year’s kharif crop being harvested. As for the 2018-19 rabi crop, whose harvesting was completed by May, the admissible claims “have not yet been worked out in most of the states”.
A major cause of delayed claims settlement is crop cutting experiments (CCE) that now form the basis for assessing yield losses.
The PMFBY’s operational guidelines require state governments to carry out at least four CCEs in every village panchayat for every notified crop and submit the yield data to insurance companies within a month from the date of harvest. Given the roughly 2.5 lakh gram panchayats in India, it means undertaking 10 lakh CCEs in a single season. The numbers will be higher if more than one crop is grown in the same village or even by the same farmer. Crop insurance claims surge, delay in disbursals falls
Getting states to do so many CCEs in a short time span has, not surprisingly, proved to be the biggest impediment to proper implementation of the Narendra Modi government’s flagship crop insurance scheme. Insurance firms are supposed to pay claims within two months of completion of CCEs that generate actual yield data to estimate losses vis-à-vis seven-year average thresholds. Since that doesn’t come on time, it leads to delays in farmers getting their claims as well.
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There is a way out of this mess, though. That solution could come from automatic weather stations (AWS). These machines — basically automated versions of traditional weather stations costing Rs 50,000-100,000 each, which includes installation expenses that may vary according to location — measure simple parameters such as temperature, relative humidity, wind speed and direction, and rainfall. They can capture this data every 10 minutes or so and transmit it on an hourly basis through mobile communication to a remote computer/cloud server.
The weather data recorded by the AWS sensors are a good proxy for yields. A spike in March temperatures, for instance, translates into poor grain-filling in wheat — just as below-normal rains during July-August are bad for most kharif crops, high relative humidity at this time is conducive for pest infestation in cotton, and heavy winds in February-March may cause damage to the standing mustard or chana. 80-90 per cent of crop yield losses are clearly attributable to the said weather parameters, which can be measured, recorded and archived in data loggers using AWS.
The Uttar Pradesh government is in the process of floating tenders for installation, operation and maintenance of 2,750 AWS. Each of them, to be installed at specific locations based on geospatial mapping, would cover an area of 10 square km. “Simply put, we will now have accurate weather data for almost the state’s entire crop land. This will be available for not just every district having, say, a 100-sq km area, but even a cluster of villages within a tehsil or block. The data, in turn, can be used to implement a weather index-based crop insurance programme,” said a top UP government official.
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According to Jatin Singh, managing director of Skymet Weather Services Pvt. Ltd, insurance companies would be willing to accept products based on data from AWSs. “They need some basis for paying out claims. CCEs, conducted by state revenue or agriculture department official, take time. Insurers can’t be blamed for not paying until they get reliable yield data. But with AWS data, there is more transparency, less moral hazard and claims settlement can be quick, which is what farmers would also want. You could even implement this scheme using blockchain technology, to enable automated verification of claims and payments,” he pointed out.
There are an estimated 15,000 AWSs currently in India. Of these, 10,000-odd are operated by private companies such as Skymet, National Collateral Management Services and Weather Risk Management Services Pvt. Ltd, and the rest by various Central/state government departments and universities. Skymet – which claims to have 6,500-plus weather sensors – has already installed over 2,000 AWSs across Maharashtra under “Mahavedh”, a public-private partnership project. It envisages establishing an AWS network at the rate of one machine for every revenue circle, covering 12-sq km area in lowlands and 5 sq km for highlands.
Then question to ask is: Can these state government-promoted initiatives make crop insurance a viable proposition for farmers (insurance firms are certainly making a killing at present, with their gross premium collections far exceeding payouts). And can they help salvage PMFBY?
