Farce of Fasal Bima : How far the second term of Modi led BJP government would address the farmers’ distress?


India, whose rulers claim it to be the ‘largest democracy’ has celebrated its ‘festival’ of elections for almost two months long. Now the new incumbent, Modi led BJP government has once again occupied the office to rule the country for five more years. During its previous tenure, the Modi-government had promised to double the income of the peasants by 2022, announced increase in the Minimum Support Price (MSP) for procuring the produce from them and talked of having protected them by way of a crop insurance (Fasal Bima) in case of any crop loss because of natural calamities etc. Obviously, one would like to review how far the announced measures had benefitted the peasant community, pauperized and marginalized with every passing hour, and then proceed to see what this second term of the BJP government is going to offer the millions of suffering peasants of our country.  Was this government serious about addressing the question of farmers’ distress that caught national attention just before the elections? In fact, the crisis in agricultural sector has become so acute that in the recent past, entire country had witnessed surge of quite a number of militant peasant agitations. So initially, all the parliamentary parties of different hues who are engaged in vote-based politics had posed themselves as champions of farmers’ cause till the announcement of election schedule. But once drum-beatings of election campaign started, all burning problems of the people including the issue of farmers’ distress were relegated to the back. All non-issues had become the issues of election. A conspiracy had been hatched to focus mainly on personal mudslinging and muscle flexing against each other, instigating divisive feelings, competing in enchasing religious sentiments, stroking national jingoism with warnings of war-like attacks at borders etc. Thanks to the pliant media and bourgeoisie propaganda machinery that the attention of the people were craftily diverted from the real issues and made to veer around the spruced up topics. But the hard realities of life cannot be hushed up for long. People cannot but come forward to ventilate their suppressed grievances again and again. The distressed farmers are no exception to it. They will have to hit streets again with much more strength and stamina. So what is needed is a clear conception about farmers’ distress, its root cause and ever-lasting solution.

Spectacle of doom and disaster

It is a fact that over the years, the crisis in farm sector has intensified and hit hard by the onset of capitalist globalization. Farmers’ suicides have become order of the day. All the successive governments irrespective of hues did nothing to rescue the hapless farmers who were forced to end their life finding no way to come out of the debt trap or appalling poverty. In the two decades between 1995 and 2015, as many as 3,10,000 farmers had committed suicides. During the period between 2001 to 2011, farmers suicides had increased at an alarming rate. On an average, one farmer committed suicide every 30 minutes. Reasons for untold misery of farmers are several. The costs of all agricultural inputs like seeds, fertilizers and pesticides have been spiralling day by day because, consequent to implementation of the prescripts of globalization, the governments have cut down the input subsidies drastically and the production as well as distribution of such inputs were handed over to the giant MNCs and other private operators on a silver platter while government-owned production houses like the Hindustan Fertilizer were made sick by design and closed down. In fact, the private companies, owned by both domestic and foreign monopoly capitals, have established their monopoly over the market of agricultural inputs. According to an estimate, prices of seeds, fertilizers and pesticides have increased by 800%, 300% and500% respectively. Even some of the MNCs have virtually been allowed to corner production and distribution of particular inputs. Added to all these miseries, the supply of spurious seeds, fertilizers and pesticides is rampant. The governments never bothered about farmers in arranging proper supply of seeds, fertilizers and pesticides at reduced rates.

Another foremost problem of the small and marginal farmers is about indebtedness. As the institutional credit advanced by national banks has become the privilege of a few influential rich peasants, small and marginal farmers are falling into the clutches of private money lenders whose interest rate is exorbitantly high enough. Money lending by the micro finance institutions is creating havoc in life of rural populace with its illegal terms and conditions in case of non-payment of loans. So for the ordinary farmers, even the payment of interest itself is something impossible let alone the clearing of principal loan. Mounting debts are also driving marginalized and landless peasants into agricultural labourers. Moreover, the governments had lifted all the quantitative restrictions over the imports including agricultural products. So, Indian market is flooded with foreign products. This has led to drastic squeeze of the market for the domestic farmer’s produce. Unable to get remunerative price for many of agricultural products because the procurement machinery is controlled by an unholy nexus of dishonest administration-village touts-middlemen-ruling party leaders-planted agents of the MNC sharks with the government remaining as an indulgent onlooker, farmers are finding it hard to continue eking out a livelihood from farming any more. Even the local unscrupulous traders and the influential rural rich who lend money to small and marginal farmers to meet input costs and other farming expenses at the time of sowing or harvesting, often force the peasants to sell the crops to them at a price much below the market price. This deception or deprivation by the various groups of vested interest is a common phenomenon in rural economy. While the procurement price of agricultural products is drastically reduced at the time of harvesting, the retail price of the same produce shoots up several times in the local markets because of a slew of market manipulations by the agents of establishment and moneyed class. It is also a common feature that sometimes farmers just throw away the produce to waste since they even do not get transport or other miscellaneous expenses when they sell. So it is clear that apart from irregular rain fall, drought and other natural calamities which are causing crop failures, problems like rising input cost, indebtedness and lack of remunerative price are pushing farmers to give up farming itself. A survey conducted by the Centre for Study of Developing Societies (CSDS) noted that 76% of the 5000 farm households across 18 states preferred to take up some other work than framing. This is in nutshell the root of crisis in agricultural sector in the capitalist economy of India. 

Plethora of promises, pompous claims

When the entire farming population is faced with such an unprecedented disaster, any government worth the name should address the farmers’ distress in a holistic manner with a comprehensive plan of resolving the deep rooted crisis. Instead, all the anti-people governments be it Congress-led UPA or BJP-led NDA adopted some populist schemes and left the farmers at the mercy of the corrupt market forces. The BJP’s Manifesto of 2019 elections under title of so-called Sankalp Patra, dished out pompous claims such as doubling the income of farmers, 25 lakh crore investment in Agri-rural sector, interest-free Kisan Credit loans and so on and so forth. Not only now, even during the last 2014 elections, Mr. Narendra Modi led BJP made plethora of promises to address the agricultural crisis in the country. After riding over to power in 2014, Modi government launched with much fanfare the Prime Minister Fasal Bima Yojana (PMFBY) as an ambitious scheme to help farmers cope with erratic monsoons or weather uncertainties. In a country where over half of the un-irrigated crop area is dependent on the vagaries of the four-month-long south-west monsoon, PMFBY promised increased cover for a variety of risks at a premium of just 2% (of sum assured) for kharif and 1.5% for winter or rabi crops. It was declared that the centre and states would equally share the cost of actuarial premium payable to the insurance companies.

This scheme is being described as the flagship programme of government. But its implementation has been marked by many flaws at all stages. Right from enrolment of farmers under the scheme, collection of premiums, assessment of crop loss and finally to settlement of claims, farmers are facing many hurdles. Initially, when this scheme came into operation in 2016-17, there was a spurt in number of enrolment because of the fact that availing of bank loans was linked with the payment of premiums under this particular scheme. For farmers availing crop loans from the scheduled banks, the premium amount was deducted at source from the loan amount without even issuing a receipt for such deductions. But later on, this scheme failed to attract farmers anymore and enrolment fell drastically. The reality is that in the event of any crop damage, farmers are at a loss as to whom to reach out to since most of the insurance companies have not set up field offices to attend to customer complaints. There are many instances where assessment of crop losses is made, but payments are either delayed by months or not disbursed at all because the lending banks do not process data or states do not release their share of subsidy in time. This is catastrophic for the farmers who have suffered losses and desperately needed the money to start preparation for cultivation for the next season immediately. Any delay forces them into the clutching arms of money-lenders, who charge exorbitant rates. This has precisely been the reason behind the dire need for speedy compensation after crop losses. Yet, three years of implementing  experience  shows that this problem has not been resolved.

Because of all these factors, there is a steep decline in the number of farmers opting to join this scheme. Data from the agriculture ministry itself shows that enrolment (during the rain-fed kharif season) rose from 30.9 million farmers in 2015 to 40.3 million in 2016, an impressive 30% jump. But delayed assessment of crop loss and settlement of claims which took six to nine months led to farmers losing interest in the scheme. So, enrolment fell to 34.8 million in 2017 and further plunged to 33.3 million during kharif cultivation in 2018. According to the study made by the Delhi-based Indian Council for Research on International Economic Relations in February 2018, “the litmus test of any crop insurance programme is quick assessment of crop damages and payment of claims into farmers’ accounts directly, and from that point of view, the first year of implementation of PMFBY (2016-17) has not been very successful.”

Distress became source of minting profits

What Modi government did was to turn this scheme into a profit making enterprise for the insurance companies. As per media reports, there are 18 insurance companies that are involved in this crop insurance scheme. Of these, five are government owned and all the rest are private. According to the provisions of the PMFBY scheme, whoever would bid the lowest, would get the contract. So it is not mandatory to choose a government company if a private company makes a lower bid. So the private companies in connivance with the government administration secure major chunk of premium collections. It is known to all that farmers pay a part of amount to the insurance companies as premium. The rest is paid equally by the Central government and the various state governments. The total premium thus collected goes into the coffers of the insurance companies. In case a farmer suffers crop loss due to natural calamities, the company settles the claim from the gross premium that it had collected. It came out from the data collected by some RTI activists that for kharif 2016, rabi 2016-17 and kharif 2017, the total premium collected by all 18 insurance companies was a staggering Rs 42,114 crore. This amount includes both contribution of farmers (amounting to Rs. 7,255 crore or just over 17%) and government’s share (Rs. 34,859 crore or nearly 83%). The governments’ share is made up of equal contributions by the Central and state governments. Of this total amount, how much the insurance companies paid by way of compensation in all seasons? One would be astonished to know that the insurance companies paid out only Rs.32,912 crore as compensation. That means they were left with about Rs.8,713 crore as surplus. These companies have pocketed nearly 21% of the total amount. (Reply of the government in a starred question in parliament referred to in Newsclick 27-12-18) Another media report says that

“despite the fall in the number of farmers insured and coverage area, the total premium collected by insurance companies has not fallen. It has actually increased. In 2016-17, the total premium collected was Rs 22,362 crore. This went up to Rs 25,046 crore in 2017-18.In the two years that PMFBY has been in place, total claims paid to farmers have increased only marginally, despite the total premium having increased by more than 4.5 times.For the two years after PMFBY, the data provided by the ministry shows that total claims paid have only increased by 10% to Rs 31,613 crore as of October 10, 2018. Thus, the surplus for insurance companies till that date is Rs 15,795 crore, almost a third of the premiums collected. (The Wire-12-1-18)

It is the same money that suffering farmers had paid out as premium or the government’s money which is in fact collected from the people by way of over taxation. Big corporates like Reliance, Essar have amassed huge sums in states like Maharashtra where the farmers’ distress is in centre of focus. In Maharashtra, around 2.80 lakh farmers sowed soya in their farms. In a district, the farmers paid a premium of Rs 19.2 crore, the state government and the central governments paid Rs 77 crore each, amounting to a total of Rs 173 crore, which was paid to Reliance insurance. The entire crop failed and the insurance company paid out the claims. Reliance paid Rs 30 crore in that district, giving it a total net profit of Rs 143 crore without investing a single rupee. So making profits running into hundreds of crores of rupees out of farmers’ distress is the hall mark of the PMFBY scheme. Modi led BJP government had facilitated this loot as a faithful and subservient political manager of big corporates. In fact, reaching out riches to the corporates through the conduit of the insurance companies owned by them has been a very convenient policy for the bourgeois governments.  Through boastful announcement of insurance covers either in agriculture or health or any other sector, the government seeks to impress as if necessary security has been guaranteed to the marginalized section of the toiling masses. But, then in absence of proper infrastructure as well as preponderance of a surfeit of loopholes, flawed operative machinery, rampant corruption, nepotism make such announcements a mockery. Fasal Bima is a glaring testimony of that. If one takes to go deep into the terms of the insurance, it would be evident that exclusions and non-claimable items are perhaps more than what are admissible as claims. Moreover, the entire mechanism acts in such a away that most of the  benefits  reach  out  only   to a  handful  of  rich  peasants  and their lackeys while the large number of real needy are conveniently left out.

Farmers’ struggle needs to be oriented on working class approach

The above facts make it clear once again that every policy or a programme adopted by all successive governments intended not to protect the interests of common toiling masses but to fetch fabulous profits to their masters i.e. the ruling capitalists. The PMFBY is a classic example of the same. Really, the first term of Modi government did wonderful job of serving them in a most faithful manner and creating social and economic inequalities in an unimaginable dimensions. It is known to all that 73% of country’s wealth has been concentrated in the hands of those 1% super rich. If this is the meaning of ‘development’ or ‘prosperity’ of the country, what can be expected more in the coming five years? So the suffering farming community must be mobilized through out the length and breadth of country on correct working class approach to force the reluctant governments   to   adopt   a   pro-peasant policy of resolving farm sector crisis by reducing prices of agricultural inputs, providing irrigation and institutional credit facilities, ensuring remunerative prices,  curbing  corrupt  middlemen in the crop procurement market etc. Along with it there is a need to frame comprehensive and robust government run compensation scheme  that   has   quick   and simple method of assessing crop damage and  free  from  corruption  and hassles in claim settlement  instead of allowing corporate companies which   are   out   to   suck  the farmers blood  and  plunder  public  exchequer.

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