Farmers Left Behind, Insurers Cash In
• Crop Cover or Corporate Jackpot?
• Rs 50,000 Cr Profit, But Who’s Protecting Farmers?
Unmesh Gujarathi
Sprouts News Exclusive
Crop insurance schemes, originally launched to protect farmers from the devastating impact of natural calamities, have ironically turned into profit machines for insurance companies. In the last five years alone, these companies have collectively earned a staggering Rs 50,000 crore in profits, while compensation to farmers has steadily declined.
According to data from the Union Ministry of Agriculture and Farmers Welfare, the Pradhan Mantri Fasal Bima Yojana (PMFBY) was introduced in 2016-17 to assist farmers affected by floods, hailstorms, unseasonal rains, landslides, and similar disasters. While the scheme aimed to offer financial relief to distressed farmers, the ground reality paints a different picture—where insurers win and farmers lose.
An in-depth investigation by the Sprouts News Special Investigation Team reveals that between 2019-20 and 2023-24, a total premium of Rs 1.54 lakh crore was collected by 17 insurance companies. However, only Rs 1.05 lakh crore was paid to farmers as compensation, leaving companies with a massive profit of Rs 49,704 crore.
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Year-wise Breakdown (in crores):
• 2019-20: Premium – 32,261.86 | Payout – 27,913.30 | Profit – 4,348.56
• 2020-21: Premium – 31,665.53 | Payout – 21,225.05 | Profit – 10,440.48
• 2021-22: Premium – 30,035.19 | Payout – 20,850.69 | Profit – 9,184.50
• 2022-23: Premium – 31,115.17 | Payout – 18,385.14 | Profit – 12,730.03
• 2023-24: Premium – 29,505.82 | Payout – 16,504.54 | Profit – 13,001.28
Despite being designed for farmer welfare, the scheme has led to growing allegations of corruption, mismanagement, and misuse of funds. Many experts and farmer advocacy groups now argue that the crop insurance framework urgently requires restructuring.
In a recent statement, Maharashtra Agriculture Minister Manikrao Kokate admitted:
“Crop insurance has not benefited farmers as expected. There have been irregularities and financial losses to the government. The agriculture department is planning to revamp the scheme, and an announcement will be made soon.”
• Maharashtra Alone Accounts for Over Rs 10,500 Crore Profit
The Sprouts News Special Investigation Team also uncovered that from 2016-17 to 2023-24, insurance companies in Maharashtra collected Rs 43,201 crore in premiums from the state government, central government, and farmers. Out of this, only Rs 32,610 crore was paid as compensation, leaving a surplus of Rs 10,591 crore in profit.
The fiscal year 2020-21 stands out as the most profitable year for insurance firms in the state. Companies received Rs 5,806.21 crore in premiums but disbursed only Rs 1,431.34 crore to farmers, reaping a whopping Rs 4,374.87 crore in gains. In that year, farmers received barely 25% of the total premiums collected.
Following 2022-23, the BID model (80:110) was implemented in Maharashtra, resulting in a relative improvement in compensation amounts. However, the core concern remains: crop insurance has become a lucrative business for companies rather than a lifeline for farmers.