Jumlebazi on crop insurance backfires

TOO MUCH PUBLICITY CAN BECOME NEGATIVE PUBLICITY

NK SINGH 

Companies engaged in crop insurance business just made a killing in Madhya Pradesh, earning a profit of nearly Rs 1,200 crore in a single season.  They collected premium of Rs 3,000 crore from farmers and government and paid 1,800 crore as insurance benefit to those who suffered kharif damages last year. “The scheme seems beneficial to insurance companies,” says former Chief Secretary of MP, Nirmala Buch, who is passionate about a farm that she cultivates at outskirts of Bhopal.   

No one will grudge the profit that the companies made – profit and loss are legitimate business for underwriters – even if it comes out of taxpayers’ money. Farmers are required to pay only one-fifth of premium. Remaining share comes from your and my pockets.

The crop insurance scheme is in news because the government walked extra miles for it. The mai-baap sarkar tried to turn something as routine as insurance payout into a grand celebration of its ‘achievement’. It organised glittering functions all over the State, attended by hundreds of people, spending lakhs of rupees for distributing insurance payment certificates.

Try to imagine reaction of ‘beneficiaries’ when they discover, to their shock, that they were made to travel for miles to collect paltry compensation of Rs 4, Rs 17 or Rs 20. That is what happened in MP recently when farmers received compensation for crop insured under the much touted Prime Minister Crop Insurance Scheme.

“It can’t buy even a cup of tea,” said Badamilal, who has become something of a legend in Sehore district for receiving the princely amount of Rs 4.70. It was from Sehore that Narendra Modi had launched the PM crop insurance scheme last year. An infuriated ‘beneficiary’, who received Rs 17, told a news channel, “It can’t buy even a shroud if I commit suicide. Give the money to Shivraj Singh.” MP Chief Minister is getting flak for Modi’s pet scheme. Coming closely on the heels of Mandsaur firing, negative publicity over crop insurance has worried the State Government.

The fiasco turned into an embarrassment as government attempted to make PM and CM immortal by putting their pictures on certificates of crop insurance. The publicity backfired. More than 250 farmers of a village in Khargone district, who received compensation of Rs 2.83 each, demonstrated last December and burnt copies of their crop insurance certificates.

One major component of MP government’s plan to make agriculture profitable is publicity. Of the Rs 59 crore that the State Government spent last year under this head, Rs 35 crore was spent on publicity. 

Stung by sensational media reports and response of farmers, Shivraj Singh is learnt to have asked the agriculture department to take up the matter with New Delhi. “We are writing to central government to fix a minimum amount of payout under crop insurance,” revealed Dr Rajesh Rajora, the principal secretary of agriculture department. As the department’s Principal Secretary for the last four years, Rajora is credited with the State’s sterling performance in increasing agriculture production. In 2014-15 agriculture production grew by a whopping 20 per cent in MP.

The government has, of course, an explanation for the low payouts of insurance money. Sources in agriculture department say last kharif was the best in 20 years. A good crop means less insurance payout. Hence in certain areas, payments touched such ridiculous figures. The average payout to farmers was over Rs 24,400. Of the 36.54 lakh farmers who had opted to insurance their kharif last year, 7.42 lakh received insurance amount totalling Rs 1818.96 crore. This year, estimate the officials, insurance payouts may go up to Rs 8,000 crore due to bad crop.

But farmers fail to understand insurance companies’ algorithm that they lost crop worth Rs 4.70 in their fields. How much they lost? One hundred grams of wheat? Asks Kisan Jagriti Sangathan chief Irfan Zafari: “Were not we promised full compensation?”

That is the crux of the problems. When PM crop insurance scheme was launched last year, farmers were promised the moon. Politicians made them feel that if they buy this insurance, it will be panacea for all their problems. They entered the scheme with heightened expectations.   

A press release of MP Government, issued last week in the wake of insurance fiasco, reads out the fine print. The payouts were low in certain cases, clarifies the government, because the scheme is not individual-based, but area-based. The compensation that farmers received was based on average losses suffered in their area.

This is not what farmers were made to believe all along. Here it is straight from biggest horses’s mouth. Explaining salient features of his crop insurance scheme to farmers at a meeting in Sehore last year, the PM declared:  “It is a historic decision; Even if he is the only farmer who has suffered losses (in that village), he will still get benefit of the insurance scheme.”

Need one add anything after this? Was Narendra Modi’s promise just another jumlebazi?

My column, Powers That Be, in DB Post of 3rd Oct 2017

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