Discuss the various changes made by the central government to implement crop insurances schemes effectively. (200 Words)
Refer - Financial Express
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KEY POINTS
· The Pradhan Mantri Fasal Bima Yojana (PMFBY) is the largest risk-mitigation programme launched by the government for providing a protective shield to farmers from all natural risks over the entire cropping cycle.
· The scheme is in its fifth year of implementation and has been recently revamped to address the challenges in smooth implementation, including making it voluntary for all farmers and leveraging technology.
· A lot has been said about the participation of private companies and insurance companies reaping supernormal profits from the scheme. In the first three years of scheme implementation for which complete data is available, the claims ratio at the national level for all insurance companies combined is 89%.
· In the revamped scheme effective from kharif 2020, the provision has been made to allocate work to insurance companies for a period of three years, which will average out any volatility in terms of high/low claims ratio seasons and will act as an ideal period for the analysis of the scheme in terms of claims paid by insurance companies with respect to the premium collected.
· The primary driver of the premium is the unavailability of historical yield data at the granular level and the discrepancies on account of human errors in computation/calculation and recording of yield data.
· Technology-based yield estimation through a robust arithmetical model incorporating satellite imagery, gridded weather data and soil moisture data can go a long way in moderating the premium rates and stabilising the scheme implementation.
· The agriculture ministry has initiated large-scale prominent government, international and private technical agencies and it is expected that a tech-based protocol for yield estimation would be in place in 1-2 years.
