Maha polls: As political parties promise complete waiver, farmers default on crop loan but pay up for insurance scheme


Why central government schemes failed to fix the crisis in sugar sector
or farmers in Latur, in case of failure of their soyabean crop, the compensation assured is around Rs 43,000 per hectare, which is enough to recover the cost of production.

The number of non-loanee farmers is higher than the number of loanee farmers enrolled in the Pradhan Mantri Fasal Bima Yojana (PMFBY) in Maharashtra.

The central government’s flagship programme, PMFBY insures farmers against crop loss due to inclement weather. Under the scheme, farmers have to pay 2 per cent of the premium amount and the government pays the rest. The scheme is compulsory for farmers who avail short-term credit or crop loans from banks, while non-loanee farmers have the option to opt for it by paying the premium.

Enrollment figures for the present kharif season show that the number of non-loanee farmers far exceeds the enrollment by loanee farmers. Of the 1,26,47,917 farmers who had enrolled for the scheme, 1,11,64,343, or 88 per cent, were farmers who had not availed of crop loans from banks.

Over the last three years, the scheme has seen more participation by non-loanee farmers. For the rabi and kharif seasons of 2018-19, 139.98 lakh farmers had opted to insure their crop, and 126.07 lakh of these were non-loanee farmers. Similarly, for the 2017-18 financial year, of the 100.91 lakh farmers who had insured their crop, 79.98 lakh had not availed of institutional credit.

Farmers cite the low premium rates and the guarantee of compensation as the reason for opting for the scheme. Vachist Bedke, a farmer with 4.5 acres of holding in Rajapur village in Beed’s Georai taluka, had paid around Rs 2,500 to insure his crop of soyabean (1 acre) and cotton ( 1 acre).

Bedke, who grows sugarcane on the rest of the land, has not defaulted while repaying Rs 3 lakh of crop loan in the last few years. “It hardly costs me anything but the cushion of insurance will help me in case of crop failure,” he said.

For farmers in Latur, in case of failure of their soyabean crop, the compensation assured is around Rs 43,000 per hectare, which is enough to recover the cost of production.

Maharashtra’s record of payment is another reason for more farmers opting for the scheme. For the 2018-19 financial year, insurance companies which had collected a gross premium of Rs 4,778.33 crore had paid out a total compensation of Rs 3,730.52 crore.

But while farmers seem to be paying their insurance premiums, they are not showing the same alacrity when it comes to repaying their

short-term crop loans. For the current kharif season, banks that were expected to disburse Rs 43,844.29 crore have managed to disburse about Rs 19,930.39 crore, only 45 per cent of the target.

For the 2018-19 financial year, banks could disburse only Rs 31,282.12 crore, a little over 54 per cent of the target of Rs 58,331.72 crore.

Bankers and officials of the state Cooperation Department told The Indian Express that political parties’ promises of bringing in a loan waiver in the run-up to the Assembly elections have led to many farmers wilfully defaulting in repayment of loans. “The campaign trail has seen leaders talk about a complete loan waiver and now, those who were regular payees have also started defaulting,” said a bank official.

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