2018-CGS-28: Mains Revision-16: Primary Sector of Economy

Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri fasal Bima Yojana (PFBY) is a crop insurance scheme wherein there will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%.

PMFBY is the most farmer-friendly crop insurance scheme.

  • The sums insured cover production costs, equal to banks’ scale of finance for various crops, with farmers having to pay an average 2 per cent premium rate.
  • The gap vis-à-vis the actuarial rates based on the insurance companies’ statistical risk assessment is filled by government subsidy.
  • And with losses at every stage, from sowing to post-harvest, being covered, farmers cannot possibly ask for more.

Why PFBY has failed to be a game changer?

CAG called PFBY a classic example of poor implementation of good scheme. {FBY has failed to be a game changer because

  • Due to cumbersome process the scheme has remained as “scheme for loanee farmers”.
  • CAG report observes dilutions in state level and compromises in district level which is compromising the effectiveness of the scheme.
  • Failure of the insurance companies to set up infrastructure for the implementation of the scheme.
  • Issues like delayed notification by the state government, lesser number of notified crops and problems with threshold yield estimation have diluted the scheme.
  • Issues of inadequate and delayed claim payments.
  • Village as a unit for insurance has also resulted in claims for localised calamities getting rejected

Addressing the loopholes:

  • The main flaw in PMFBY is its design, wherein 50 per cent of the premium subsidy is borne by the state governments that are also responsible for conducting crop cutting experiments (CCE) to determine yield losses.
  • Given that the scheme is in the prime minister’s name and insurance is worth subsiding far more than fertilizers or crop loans it makes sense for the Centre to fund the entire premium subsidy. The insurance companies can no longer, then, complain about not getting their premium monies, especially states’ share of subsidy, in time
  • The Centre can further link release of subsidy to the states adhering to prescribed operational schedules, including carrying out the requisite number of CCEs using remote-sensing technology for smart selection/sampling of fields and capturing survey data using mobile phones with time and date stamping. This will enable faster processing and payment of claims. [Indian Express]

River Interlinking and Crop Diversification

Indian agriculture is referred as gamble with monsoons. As a result cropping pattern in the country is largely driven by the monsoonal patterns. River interlinking can provide a way out of the rain driven agricultural pattern and aid in crop diversification.

River linking and crop diversification

  • Assured irrigation will allow adoption to high yield variety seeds which was witnessed during green revolution.
  • Rainfed areas are cultivating low yield crops like jowar, bajra, Ragi etc. River interlinking will allow switching over to high yield crops like rice, wheat
  • Assured irrigation due to river linking will also aid in horticulture expansion in the country. There can be expansion in cultivation of vegetable, fruit and other commercial crops like areca nut, Pomegranate, Sugarcane etc.
  • Lack of irrigation is resulting in tracts of land being left uncultivated in the regions of Deccan, Vidharba and central India. River Interlinking can aid in expansion of agriculture in these areas thus enhancing crop diversification.
  • Area under pulses can also be expanded as the pulse cultivation is currently concentrated in rainfed areas. Assured irrigation due to river linking will result in increased yield of pulses. Thus enhance more investments in pulses and in expansion of its area under cultivation.

River interlinking will provide with assured means of irrigation. There are examples which show how assured irrigation has resulted in crop diversification. Expansion of irrigation facilities due to multi-purpose projects along Cauvery, Krishna has brought drastic changes in cropping patterns.

River Interlinking may be detrimental for crop diversification

There are chances that interlinking of rivers may result in adversely affecting the crop diversity because: