Farmers Show Little Interest in Voluntary Crop Insurance Despite Floods

Bhopal, August 18 – Even as heavy rains and floods continue to impact the state, farmers have shown little interest in voluntarily opting for crop insurance. The majority of applications received under the scheme are from farmers who have taken agricultural loans from cooperative societies and banks for the kharif season. In contrast, voluntary participation remains extremely low, prompting insurers not to extend the deadline for such applicants. Voluntary farmers were given time only till August 14 to enroll.

Insurance Compulsory for Indebted Farmers

According to the Agriculture Department, around 1.14 lakh indebted farmers have applied for crop insurance so far. Their kharif crops, sown across 2.54 lakh hectares, are being insured.

Under existing rules, crop insurance is mandatory for loan-taking farmers, as banks recover dues from insurance claims in case of crop loss. This system automatically brings indebted farmers into the scheme, explaining why their enrollment is much higher compared to voluntary farmers.

Very Few Voluntary Applications

In sharp contrast, only 7,400 voluntary applications have been submitted, covering about 4,500 hectares of farmland. Officials say the lack of enthusiasm reflects farmers’ lack of confidence in the scheme. The Agriculture Department further clarified that the deadline was not extended due to the very low response from voluntary farmers. Meanwhile, the last date for indebted farmers has been extended until August 30.

Low Compensation Main Cause of Apathy

The primary reason behind the farmers’ reluctance appears to be the low compensation amounts provided under the scheme. For instance, during the 2024 kharif season, around 29,029 farmers received payouts amounting to over ₹76 crore. However, this translated to an average of only ₹2,622 per farmer.

At the same time, farmers are required to pay around 2% of the insured crop value as a premium. Many argue that the payout is too small compared to the costs incurred, making voluntary insurance unattractive.

Soybean Crop Dominates Insurance

Among all crops insured, soybean accounts for the largest share, with about 70% of applications. Paddy ranks second, while maize has the lowest number of applications. The government has given priority to soybean-growing regions under the scheme, which explains its higher share in total applications.

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