Crop insurance a big leap but needs fixes

The Pradhan Mantri Fasal Bima Yojana (PMFBY), India’s flagship crop-insurance scheme which is counted as the world’s largest, is a big improvement over older schemes, but its improved features haven’t made it any easier to implement or motivated all states equally.

These are some of the key findings of two first-time reviews of the scheme that tracked its performance since its launch in 2016. If the scheme is to achieve its most critical goal — timely payouts to farmers — it can’t fly without a raft of high-end technological fixes, from drones to an entirely new constellation of satellites for accurate crop assessments, experts say.

PMFBY has achieved a better design by merging multiple insurance schemes into one, simplifying norms and cutting down premiums, the evaluation shows. Its performance has varied widely between states. A more dramatic finding is that its success rates have varied even among districts within a state, pointing to local hurdles.

Insurance is critical to protecting farm incomes in a country where 54% of the sown area lacks irrigation and 12 million hectares, on average, suffer annual weather shocks.

The first study, “Governance Analysis of the PMFBY” by the Centre for Management in Agriculture of the Indian Institute of Management Ahmedabad tracked the scheme till May 2018. The second by economists of the Indian Council for Research on International Economic Relations (ICRIER) analysed it until 2016-17.

NEW DELHI: