Crop insurance be made optional: Bankers
Hyderabad, Mar 16 (UNI) Officials of public sector banks in Andhra Pradesh today felt that crop insurance scheme be made optional as some farmers were not coming forward to avail crop loans due to ''high insurance premium''.
''The premium rate of 8.85 per cent is on the high side for rain-fed cotton crop, while interest rate for crop loan is between eight and 12 per cent,'' the representatives of the banks, observed at a group discussion as part of the state-level review meeting held here.
Some farmers were paying the crop loan amount, leaving the crop insurance premium unpaid, others had approached courts for settlement of crop insurance claims, they said.
The interest rate and the insurance premium together resulted in about 20 per cent burden on farmers. A section of the farmers were not repaying crop loan every year and recycling it for farm operations, due to collection of high insurance premium at the time of renewal of crop each and every time.
Taking up the farmers cause, the officials pointed out that the insurance company taking the threshold yield on the basis of last five years was proving detrimental to peasants. In case of droughts and floods for successive years, the average yield was very low and the eligible claim amount was meagre or even nil in many cases.
UNI SM GV SD RK1935