Hyderabad: The crop insurance scheme has failed to come to the rescue of farmers in distress, thanks to the negligence of public sector banks in collecting insurance premium amount from farmers.
While farmers in Telangana have suffered huge crop losses due to drought during last year and this year, not even 10 per cent of farmers would get the insurance amount. Banks are supposed to deduct insurance premium from crop loans directly at the time of loan disbursal to farmers as per norms stipulated by the Centre.
But banks flouted these norms and neglected to collect the premium amount from a majority of the farmers pushing them into financial crisis now. However, banks put the blame on farmers for refusing to pay premium despite their insistence on it.
For instance, in the year 2014-15, various banks disbursed loans to 32 lakh farmers, according to the data available with State Level Bankers Committee. But the Agriculture Insurance Company of India Ltd submitted a report to the Telangana state government stating that it had received the premium from just 1.50 lakh farmers, who will get the insurance cover and the rest were not eligible for any insurance.
Even for the ensuing kharif season, the premium was collected from just about two lakh farmers so far. Leave alone PSU banks, even the state cooperative banks that function under the Telangana government have failed to deduct premium amount for 86 per cent of farmers while disbursing crop loans.
The Telangana agriculture department inquired into the issue and found that the banks were not guiding farmers properly on the need to insure their crops and not insisting on payment of premium at the time of crop loan disbursal.
