The Parliamentary Standing Committee on Agriculture has warned the Centre about states’ participation in the flagship Pradhan Mantri Fasal Bima Yojana (PMFBY) going down year by year, while criticising the problematic performance of the private insurance companies involved.

The Committee desired that the ministry should suitably modify the two particular provisions of the Revamped Operational Guidelines so that states do not withdraw from the scheme.

These are that states delaying the release of subsidy beyond stipulated timelines can’t participate in upcoming seasons, and the requisite Central share of premium subsidy (90:10 for northeastern states and 50:50 for remaining states) will be provided for areas/crops having gross premium rate upto 25 per cent for irrigated and upto 30 per cent for un-irrigated areas/crops and the states have to bear the entire subsidy for areas/crops having gross premium rate over and above 25 per cent for irrigated and 30 per cent for un-irrigated areas/crops.

The PMKBY was launched in April 2016 to provide a simple and affordable crops insurance product to ensure comprehensive risk cover for crops to farmers against all non-preventable natural risks from pre-sowing to post-harvest and to provide adequate claim amount. To make the scheme effective, detailed operational guidelines (OGs) were issued, which were revised, and the Revised OGs came into effect from October 1, 2018 for Rabi season 2018-19.

Subsequently, the PMFBY was revamped and Revamped OGs made effective from Kharif 2020 season.

The Committee observed that Punjab did not implement the scheme since the beginning whereas Bihar and West Bengal have withdrawn from Kharif 2018 and Kharif 2019, respectively. Further, Andhra Pradesh, Gujarat, Telangana, and Jharkhand have also not implemented the Scheme in 2020.

“As informed by the Department, the financial constraints of the state governments and low claim ratio during normal seasons are the major reasons for non-implementation of the scheme by these states, ” the report said.

The Committee observed that offices and officials of insurance companies implementing the PMFBY are non-existent at Tehsil level in several districts resulting in hardship to the farmers and hence, directed that these companies are required to open a functional office at Tehsil level in each district, deploy at least one agent at block level in the allocated districts and one agriculture graduate in each district.

There were several other lacunae in the manner in which the insurance companies operated and the manner in which the state governments failed to keep check, the committee said.

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