“Large-scale irregularities came to light (in the previous scheme). Some insurance companies indulged in irregularities. So a decision had to be taken. So far, crop insurance companies have earned profits of Rs 10,000 crore,” Maharashtra Agriculture Minister Manikrao Kokate told the House
Mumbai: Maharashtra Agriculture Minister Manikrao Kokate on Tuesday said the government implemented a new crop insurance scheme due to cheating in the previous one with middlemen siphoning off money and insurance companies earning huge profits while the farmers did not benefit from it.
Replying to a question in the legislative council, he said large-scale irregularities came to light and it was found that crop insurance companies have earned profits of Rs 10,000 crore.
In April this year, the state government approved a new crop insurance scheme under which farmers will have to pay a premium ranging from 1.5 to 2 per cent of the insured amount, as against the earlier scheme where they had to pay only Rs 1.
The government had come out with the Rs 1 crop insurance scheme in 2023, under which a farmer was required to pay only Re 1 as his or her share of premium while the rest was paid by the state government. But there were complaints of irregularities in the scheme.
“Large-scale irregularities came to light (in the previous scheme). Some insurance companies indulged in irregularities. So a decision had to be taken. So far, crop insurance companies have earned profits of Rs 10,000 crore,” he told the House.
“A question arose before our department that if insurance companies are benefiting from this, then why can’t the amount be invested as capital for farmers,” Kokate said in response to a question in the council.
“Cheating was taking place in the (previous crop insurance scheme) and farmers were not getting money, middlemen were siphoning money and insurance companies were earning huge profits. Looking at this, a new crop insurance policy has been implemented,” Kokate said.
In a written response, Kokate said from the kharif season of 2023, the state government approved an insurance policy where the farmers only had to pay Re 1 as the premium and the rest of the premium was to be borne by the state government.
Kokate said there was a burden of Rs 7,975 crore on the state government due to this scheme.
“It came to light that the applications for the kharif season of 2023-24 increased two times, while they went up 10 times for the rabi season. It was also found that there were irregularities in the applications,” Kokate said.
Accordingly, a modified crop insurance scheme was introduced from this year’s kharif season.
This is not the first time that Kokate has criticised the crop insurance schemes. Speaking in the legislative council on July 8, he had said it is a fact that insurance companies benefited more in the crop insurance scheme than the farmers.