Sep 30, 2015

Finally, a crop compensation scheme that makes some sense

At a time when Punjab chief minister Prakash Singh Badal has received a lot of flak for the meager compensation being paid to cotton farmers hit by whitefly attack, Haryana has come up with a crop compensation plan that needs active consideration.

A report ‘Invested Rs 16,000, got Rs 80 for 100% cotton crop loss’ (Hindustan Times, Sept 26) sums up the nemesis of the flawed crop compensation schemes. Although Punjab had earlier announced a maximum of Rs 10,000 per acre to be paid to farmers in event of a 100 per cent crop loss, the primitive way of assessing crop losses and improper revenue records has come in the way. Whatever be the reason, the fact that farmers are not being adequately compensated even after so much of furor, anger and even frustration leading to suicides, is indicative of the lack of urgency in policy planning to address farmers grievances.

Knowing that all existing crop insurance schemes, including weather-related crop insurance, fails to act as an effective and meaningful insurance cover at times of natural calamities, Haryana has proposed a crop compensation plan that promises to provide a maximum of Rs 20,000 per acre for 100 per cent loss in wheat, paddy and cotton. For pulses, oilseeds and other coarse cereals like bajra and jowar, a compensation of Rs 15,000 has been proposed in case of total crop loss. The proposal has in principle been approved by chief minister Manohar Lal Khattar and awaits a nod from the Centre.

Unlike the traditional approach of assessing crop damage that a farmer suffers on the basis of the total loss suffered in a block, Haryana’s approach to pin point crop loss on a per unit basis is certainly going to be much appreciated. It is primarily for this reason that I had for long suggested the application of satellite images for mapping the damaged areas, and also utilizing the services of Agricultural Development Officers who can provide technical inputs while assessing damages. When satellites can be used to count the number of trees I fail to understand why it shouldn’t be used for assessing crop losses on a unit basis.

Haryana proposes to include satellite imagery in the first stage. Tehsildar along with concerned officials from the block level will be members of a team that will examine satellite data within 48 hours of a natural disaster. At the second stage, physical verification will be undertaken by two teams simultaneously – one comprising the patwari and nambardar, and the other having Sarpanch and Agricultural Development Officer. This will certainly minimize the chances of corruption that existed in the earlier girdwari exercises.

Farmers will have to contribute a premium of Rs 500 for wheat, rice and cotton, and Rs 375 for other crops. An equal amount will be contributed by the Centre and the State governments. Past experience shows that while insurance companies made a killing by getting the premium automatically from the banks for those farmers who were drawing credit, the insurance benefits were not passed on to farmers. Knowing this, I am sure farmers would be reluctant to partake in this new crop compensation scheme. It will therefore make sense if the government makes it compulsory for all farmers, and works out a mechanism of further reducing the premium amount. Once the farmers see the benefit, if at all it is properly implemented, I see no reason why farmers would not be willing to pay a higher premium.

Compensation for the crop losses has been spelled out in four slabs. The minimum packet of compensation will be Rs 5,000 for a crop loss varying between 15 to 25 per cent (in case of wheat, rice and cotton). Considering that the banks are able to recovering not even a fraction of the original loan amount that industry gets, under restructuring of bad loans, I strongly feel the government should raise the crop compensation amount substantially. A loss of a standing crop should not only be measured in terms of the amount spent on raising the crop but on what the loss implies in terms of a setback to farmers livelihood. After all, a farmer too has a family to look after.
With Delhi providing Rs 50,000 per acre, neighboring Haryana cannot be left discriminating. Moreover, what is not understood is that a crop like wheat takes about 6 months to grow. Providing a maximum compensation of Rs 20,000 per acre as envisaged, means practically Rs 3,300 per month. How can a family be expected to survive in this paltry amount? Similarly, Rs 5,600 proposed as compensation if a farmer is unable to cultivate a crop because of calamity, is not even equal to the proposed minimum wage of Rs 9, 699 per month for skilled workers. A farmer is also a skilled worker and needs to be adequately compensated. #

1 comment:

Priya VK Singh said...

1. Are crop compensation and crop insurance schemes the same thing?
2. Do the tehsildar etc possess the knowledge and skills to interpret satellite imagery? Are they already doing it?
3. Will the reliance on satellite imagery also tackle the problem of improperly maintained revenue records?
4. Should we not wait to see whether the proposed scheme is properly implemented before making it compulsory?
5. How has the amount of Rs 3300 per month been calculated?