ECONOMIC PERFORMANCE OF PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY) IN HYDERABAD-KARNATAKA (H-K) REGION
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Date
2018-07-30
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UNIVERSITY OF AGRICULTURAL SCIENCES RAICHUR - 584 104
Abstract
Crop production is prone to huge risks due to erratic rainfall, climate change, natural disasters, market imperfection, pest and diseases. Crop insurance is a major risk mitigation tool available to farmers. This study had analysed the physical and financial performance of one suchcrop insurance scheme namely Pradhan Mantri Fasal Bima Yojana (PMFBY) by comparing with the performance of previous crop insurance product Modified National Insurance Scheme (MNAIS) in Karnataka. To analyse the effectiveness and risk minimisation under PMFBY in H-K region, data were collected from 80 insured (40 each of loanee insurers and non-loanee insurers) and 40 non-insured farmers. Overall, the performance of PMFBY in Karnataka during the year 2016-17 revealed that there was an increase of 77.20 per cent in number of farmers insured and an increase in area insured by around 65 per cent from 2015-16 to 2016-17. Further there was an increase of around 41 per cent in farmers insured and around 50 per cent in area insured from kharif 2016 to kharif 2017 in Karnataka. However, the trend was opposite in H-K region as there was a 5.84 per cent decrease in farmers covered and 3.69 decrease in area insured. The overall claims to premium ratio was less than unity 0.99 and 0.64 in Karnataka and H-K region respectively during kharif 2016, implying PMFBY was financially viable. Education level, farm size, compensation and percentage of irrigated area were the main factors which significantly influenced farmers’ participation under PMFBY. On an average, 52 per cent of risk in Zone 1 (Bidar) and 40 per cent of risk in Zone 3 (Koppal) was reduced by PMFBY during kharif 2016. Delay in claim settlement, lack of grievance settlement mechanism at local level and awareness were the major constraints faced by the sample farmers. Overall, in spite of improved performance of PMFBY compared to previous years, only 29 per cent of the net sown area of Karnataka was insured during the year 2016-17. Thus, to make PMFBY more effective it is suggested to provide premium discounts for group coverage of farmers and also to consider shortfall in revenue of farmers rather than shortfall in yield to widen the risk coverage of farmers which would bring in more farmers under crop insurance.
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