Good News: Insurance Firm to Pay Heavy Compensation to Farmers for Crop Damage

Insurance companies are likely to pay heavy compensation to the farmers across the nation as the dry weather in June and floods in September damaged crops in many states particularly in Maharashtra, where the outgo is expected to be more than Rs 10,000 crore, said the Agriculture Ministry on its recent reports.

Government official said that about Rs 18,000 crore, which is close to the previous fiscals’ approved claims of a little over Rs 19,000 crore is the total claims for this year’s summer-sown or Kharif season which included the winter crop as well.

As per reports, payment for damaged rice, cotton, oilseeds, pulses, sugarcane and horticulture crops will be paid under the Pradhan Mantri Fasal Bima Yojana (PMFBY) launched in 2016 in which a farmer contributes only 1.5% to 2% of the insurance cost and the balance is shared by the Centre and states.

Farmers may get Rs 10,000 crore to Rs 11,000 crore apart from Maharashtra, where, officials have estimated payout of Rs 4,000 crore in Madhya Pradesh, and Rs 1,000 crore to Rs 1,200 crore each in Karnataka and Andhra Pradesh. Compensation in other states would not be big as crop losses are estimated to be low, said the officials.

“Surveys for the assessment of losses are on in these states. Preliminary surveys have indicated the large scale of damages and huge estimated payouts. The picture will become more clear when claims settle by February-end. Insurance companies will have to take a major hit,” said a senior agriculture ministry official, who is dealing with crop insurance.

According to the latest data from the agriculture ministry, 22.8 million farmers from these four states have been covered under PMFBY, comprising 57.5% of the total 39.65 million insured farmers across the country in this  Kharif season.