Page 50 - Insurance Times August 2019

The committee identifies the potential use cases for Zala, an indefatigable crusader for farmer rights, even went
blockchain technology in areas such as payments systems to the Supreme Court. In 2013, he moved the apex court
including cross-border and small value payments; data through CRANTI over the issue of farmer suicides. At the
identity management or know-your-customer requirements time, the centre was forced to admit that there were over
by various financial entities; insurance; collateral and own- 12,000 suicides in the agriculture sector every year.
ership (including land) registries; loan issuance and track- Realising the magnitude of the crisis, the Court expanded
ing; e-stamping; trade financing; post-trade reporting; se- the scope of his petition, which was confined to Gujarat,
curities and commodities and internal systems of financial to encompass the entire country. It asked the centre to
service providers. frame a policy to deal with the root cause of the problem.
The case was fought by well-known lawyer Colin Gonsalves
“The advantages of using DLT are mainly seen in terms of virtually free for CRANTI. “In fact, the lawyer would even
reducing administration and transaction costs, obviating fund my travel to Delhi,” said Zala.
duplication and improving accuracy of data, improving the
Interestingly, during the 2014 general election, farmer sui-
speed and efficiency of transactions and detecting fraud,"
cides in Gujarat were the subject of a slanging match be-
the committee said.
tween then Chief Minister Narendra Modi and AAP leader
Implementing the ban may not be easy, though. US anti- Arvind Kejriwal. Kejriwal’s stance was that 5,874 farmers
virus software guru and crypto bull John McAfee tweeted: had committed suicide in the state in the last 10 years,
“India announces it plans to ban all crypto. Banning mos- while Modi said that only one farmer had killed himself due
quitoes after a rain in the summer would stand a better to crop failure. The actual figure given to Zala, in response
chance of being enforceable." to an RTI plea, is 692 suicides between 2003 and 2012 when
Modi held the reins of the state.
Crop Insurance: A Harvest of Woes Attorney General KK Venugopal’s plea to the Supreme

A patriot must always be prepared to defend his country Court, furnishing details of PMFBY, was that it was the
against his own government, goes an old saying. The farm- panacea for almost all the ills plaguing the sector and it
ers of Gujarat find themselves in precisely such a predica- would provide insurance cover for all stages of the crop
ment. First, they face ruin from the elements and then cycle, including post-harvest risk. The Court noted that a
need to be saved from a government which has set out to scheme of such proportions needed time to be imple-
save them. mented and granted the same.
The immediate provocation for such a reaction came from However, the Congress leader in the Gujarat assembly,
Bharat Zala, director of Citizens Resource & Action Initia- Paresh Dhanani, went on record last year, alleging that this
was a scam. “By making this central scheme mandatory for
tive (CRANTI), an NGO, after the Vijay Rupani-led BJP gov-
farmers and bringing in private players instead of the Agri-
ernment replaced the existing crop insurance scheme and
culture Insurance Company (AIC) of India, the NDA govern-
set up a separate fund to compensate for crop failure. The ment is pulling off a scam of Rs 1 lakh crore, eventually
state government, it is learnt, has got an in-principle nod benefitting private insurance companies,” he said.
from the centre for the fund which is likely to have an
annual corpus of over Rs 3,000 crore. The centre will make The AIC, he said, earlier insured crops of farmers who opted
available its 50 percent share of the insurance which was for it voluntarily. “But after the NDA came to power in 2014,
hitherto being given to private insurance funds. the AIC was replaced by private insurance companies and
farmers were forced to go for the renamed Pradhan Mantri
Prime Minister Narendra Modi’s ambitious Pradhan Mantri Fasal Bima Yojana.” Dhanani claimed that private players
Fasal Bima Yojana (PMFBY), launched in April 2016, was were now being paid a hefty premium of over 50 percent
aimed at providing crop insurance to farmers in case of from the state and central treasuries.
crop destruction due to natural factors. Instead, the “In my constituency in Amreli district, 41 percent of the
scheme has become a profit-making enterprise for private insurance premium was agreed to be paid to the insurance
insurance companies with inordinate delays in settling com- companies by the government in 2015. The figure was 53
pensation cases and large-scale rejections.
percent in 2016 and 55 percent in 2017-18. Farmers pay
Farmers believe that not even 20 percent of the total claims two percent, while the rest is paid by the state and the
submitted by them have been approved. The crop insur- centre. This comes to roughly over Rs 1,00,000 crore which
ance premium burden is shared by the state and the cen- has been paid to private insurance companies across the
tre in a ratio of 49 percent each, while the farmers bear country. These companies have not even carried out proper
two percent of it. surveys for claims assessment,” he said.
50 The Insurance Times, August 2019