1. “Issues of discrepancies between the sown and unsown areas in Crop Insurance and actions taken by states to address this problem, including use of technology Date : 16/09/2016 National Conference on Agriculture for Rabi Campaign-2016 Group-VI “Issues of discrepancies between the sown and unsown areas in Crop Insurance and actions taken by states to address this problem, including use of technology Date : 16/09/2016 National Conference on Agriculture for Rabi Campaign-2016 Participating states: Gujarat, Karnataka, Uttar Pradesh, Andhra Pradesh, Rajasthan, Chhattisgarh, Jharkhand, Tamil Nadu & Odisha

2.  Generally loaning period start from 1st of April every year. Crop registered at the time of loaning may be different as the farmers shows only his intention of rearing crop at the time of loaning.  Usually farmers avail short-term loan against their whole land and Banks consider whole land for crop insurance instead of the actual area cultivated of the notified.  Tendency of the farmers to show higher value crops in terms of Scale of finance with intention to fetch higher claims in case of yield losses. Issues:

3.  Actual sowing depends on the circumstances of the season. Crop may change as season progresses.  Farmers never get opportunity to change the crop if the crop is different w.r.to loaning.  Lending Banks only interested to fulfill target of the priority sector and also interested to insured their loan with subsidized crop insurance.  Requirement of collateral for short-term crop loans has been diluted after discontinuation of service-area approach for banks and, farmers are free to approach any bank. Issues: contd.

4. 4  Farmers may also approach more than one bank to meet their credit requirement. This results in multiple loans and multiple insurance for the same cropped area.  Since insurance is compulsory for loanee farmers, multiple coverage is an obvious outcome.  Lending Banks often include the area where the crop is sown but not germinated (known as beejmari) while declaring the insured area in their proposals / declarations.  Tendency of farmers to avail total sanctioned limit of loan in beginning of year leading to insurance of total loan amount in one season thus showing total area in one season and as such creating discrepancy between sown area & insured area. Issues: contd.

5. Provisions in PMFBY to Prevent / Minimize Area Discrepancy  Sum Insured is equal to Scale of Finance of notified crops for all type of farmers.  Removal of Nodal Bank system to reduce the error in reporting by consolidation of information of various branches.  Option to farmers has been given to change their insured crop within 30 days before the cutoff date. This will facilitate the farmers to insure their crops based on actual sown.  Use of better technology such as RST / Satellite Imagery / drones / Smart mobile phones etc. for verification & estimation of crops & yields thereof.

6. Provisions under PMFBY Contd..  Wherever the ‘acreage discrepancy’ is likely, the acreage insured at IU level shall be compared with average planted acreage of past three years, and the difference is treated as ‘excess’ insurance coverage after taking into account sown area data of the Revenue authority.  Sum insured is scaled down in the proportionate ratio and Claims shall be calculated on the scaled down sum insured  Premium (farmer share and Central and State Government Subsidy) shall be refunded back to Government of India for the portion of sum insured scaled down 6

7.  DAC & FW is developing a Crop insurance portal to integrate all concerned stakeholders on single IT platform.  This IT driven system is envisaged to address the issues which affect the current system of program administration including duplication of beneficiaries, area discrepancy etc. Provisions under PMFBY Contd..

8. Suggestions of the Group:  Change in crop by the farmers may be allowed up to the Cut off date of insurance proposal instead of 30 days before cut off date (as per present provision in the Operational Guidelines of PMFBY)  An Undertaking/ Self Declaration is to be obtained from farmers regarding sown area and crop insured. In case the details there are found wrong on verification then the Farmers share of premium would be forfeited & farmers may debarred from the scheme for that season.  The onus of proof of correct insured area and insured crop will be the responsibility of the farmers and Insurance Company may verify within 45 days after the cut off date and before the harvesting of the crops which ever is earlier. 8

9. Suggestions: Continued…  The state agency assigned with the work of estimation of sown area and yield estimation should be on board and follow timelines for assessment should be in sync with crop insurance requirements.  Central Insurance Portal should be Linked with real time computerized data of Land records of Revenue Department which will help to restrict the area up to the limit of area under possession by the farmer. (19 state with comp. LRC)  Central Insurance Portal should also generate unique number/barcode for the banks which prevent the duplication of the application in more than one bank.  Central Govt may empanel Expert Agencies for Weather Data Provider, CCE Agencies, Satellite Image Data Processing. 9

10. Suggestions: Continued…  Insurance Company/ies should monitor insured area versus area sown through proxy indicator and act immediately within 45 days after the cut off date and before the harvesting of the crops which ever is earlier.  The States may assign the work to identify Area discrepancy, Prevented sowing, Loss Assessment due to mid season adversity, post harvest losses and smart sampling of CCEs to MNCFC accordance with para XI.3.g, XI.4, XI.6 and XII. c. iv of PMFBY guideline.  The States may provide Insurance Unit wise sown Area of previous years if available ( Clause XIII of OG)  For effective implementing and monitoring of the programme and check area discrepancy, provision of contingency administrative fund should be made in OGs.  Technical Support Unit(TSU) should be established at earliest.

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13.  During the implementing crop insurance scheme in early years of 90s, cases of discrepancy in area insured & area sown (i.e. area insured is higher than area sown) have been reported regularly in every crop season specially in yield-index schemes (NAIS & MNAIS).  Settlement of such cases have been made through reducing sum insured of individual insured farmers in proportion to reported higher insured areas than area sown for particular insured crops in the notified areas and consequently all insured farmers are getting reduced claims. Evolution of Crop Insurance & Area Discrepancy

14.  In September, 2013, GOI entrusted the responsibility to suggest measures to minimize/overcome the problem of area discrepancy with Dr. P.K. Mishra, Ex Agriculture Secretary.  Committee submitted its report in May, 2014 and made various suggestions / recommendations in this regard.  Most of suggestions / recommendations have been considered and accordingly provisions have been incorporated in PMFBY which has been operationalized from Kharif 2016. Constitution of Committee to identify loopholes & Suggest Measures to GOI for Preventing / Minimizing Area Discrepancy

15. Committee’s Major Recommendations to Prevent / Minimize Area Discrepancy Suggested to use technology to address problem of area discrepancy, instead of application of area correction factor. A web portal as developed for Gujarat by NIC may be developed for other States for making land records and other data / information on crop insurance accessible to all stakeholders. Suggested use of GPRS-enabled mobile phones to capture and transmit photographs of standing crops once or twice to a server during season for verification of crops sown on particular land through matching of GPS coordinates.

16. Committee’s Major Recommendations to Prevent / Minimize Area Discrepancy Suggested that Insurance companies and Banks should undertake verification relating to area sown and area insured at periodic intervals during crop season especially in districts with a history of large area discrepancy. Suggested that Government officials concerned, representatives of insurance agencies and banks should have coordination meetings at state and district level on a quarterly basis in order to monitor area sown vis-à-vis area insured.