Shivraj Singh Chouhan Announces Penalty for Delayed Crop Insurance Payments

New Delhi [India], August 6: Union Minister for Agriculture & Farmers’ Welfare and Rural Development, Shivraj Singh Chouhan, announced in the Lok Sabha that under the Pradhan Mantri Fasal Bima Yojana (PMFBY), a penalty of 12% will be imposed on insurance companies if the claimed payment gets delayed. This penalty will be directly deposited into the farmers’ accounts.

According to the Ministry of Agriculture and Farmers Welfare, state government delays in releasing premium amounts are the primary cause of payment delays. Chouhan urged prompt action and assured that the central government will release its share immediately to prevent further delays, with payments being made directly to farmers’ accounts from the Kharif season onward.

Chouhan addressed questions about the Crop Insurance Scheme in the Lok Sabha, highlighting the challenges of previous insurance programs. He noted that earlier schemes faced issues such as inadequate claims, low insured amounts, and delays in settlement, leading to widespread dissatisfaction among farmers and farmer organizations.

Chouhan expressed pride in the introduction of PMFBY by Prime Minister Narendra Modi. Under previous schemes, there were 3.51 crore applications for crop insurance, which has now increased to 8.69 crore. The total insured amount has risen to over Rs 2.71 lakh crore, with farmers paying a premium of Rs 32,404 crore and receiving claims worth Rs 1.64 lakh crore.

The Union Minister assured that crops damaged by natural causes are fully covered under the new scheme. He also highlighted a significant change from the previous system, where loanee farmers were required to have insurance and premiums were automatically deducted by banks. The new scheme is voluntary, and coverage has expanded from 5.01 lakh hectares in 2023 to 5.98 lakh hectares, benefiting 3.57 crore farmers.

Various measures have been implemented to streamline the process and reduce complications for farmers. Chouhan explained that the PMFBY features three models. While the central government sets the policy, state governments choose their preferred model. Insurance companies, both private and public, then implement the scheme at competitive rates.

He addressed concerns about high premiums in Bihar, noting that the state has its own crop insurance scheme and has not adopted the PMFBY. The scheme now uses Gram Panchayats as the assessment unit, rather than blocks, to ensure more accurate compensation for losses. Additionally, at least four crop cutting experiments per Gram Panchayat and mandatory remote sensing assessments for losses of 30 percent or more have been introduced. These measures aim to address previous shortcomings and reduce payment delays.

While Chouhan did not see the need for a committee to review the scheme at this time, he welcomed any suggestions from members of the Lok Sabha.