PM Fasal Bima Yojana: Govt orders probe into nominal crop insurance payouts; What’s the controversy?

Union Agriculture Minister Shivraj Singh Chouhan on Monday took strong exception to reports of farmers receiving crop insurance claim amounts as low as ₹1 and ordered a full-scale probe.

Chairing a high-level meeting with senior agriculture ministry officials and representatives of insurance companies in New Delhi, Chouhan said such meagre claim settlements were a “mockery of farmers” and ordered immediate corrective action.

“Receiving claims of Re 1, Rs 3, Rs 5 or Rs 21 is a mockery of farmers, and the government will not allow this to continue,” Chouhan said, according to an official statement.

He instructed officials to conduct on-ground investigations into cases where such claims have been reported.

Chouhan, who heard grievances directly from farmers in Maharashtra’s Akola district and Madhya Pradesh’s Sehore via video conference, expressed displeasure over discrepancies in the insurance assessment process. He also questioned the accuracy of current damage estimation methods.

“What kind of method is this for measuring damage?” he asked, citing examples of Sehore farmers who received Re 1 as compensation despite insured losses.

The minister directed the CEO of Pradhan Mantri Fasal Bima Yojana (PMFBY) to coordinate with district collectors and insured farmers to verify ground realities and review the use of remote sensing technologies for loss assessment. He also asked for a revision of the guidelines that allow such low-value claims.

Chouhan instructed insurance companies to ensure that their representatives are physically present during damage surveys to prevent irregularities and expedite claim settlements.

He emphasised that claims must be paid quickly and simultaneously.

Taking note of delays by some states in releasing their share of crop insurance subsidies, Chouhan said such lapses harm farmers and tarnish the image of the Centre.

“State delays in providing due shares should not tarnish the Centre’s image,” he said, directing that states delaying payments should be charged 12% interest as per existing provisions.

He also stressed the need for greater technological integration and transparency in the scheme to ensure that farmers remain aware and no malpractices occur anywhere.

The Pradhan Mantri Fasal Bima Yojana, launched in 2016, provides comprehensive risk coverage to farmers against crop loss due to natural calamities.