How Have Farm Schemes Fared in Modi’s Home State of Gujarat?

Crop insurance that fails to compensate them, water woes, and an unhelpful Centre plague Modi’s home state, Gujarat.

5 min read
Cotton farmer Bipinbhai Phokia.

Kantilal Harthani, 67, says half of his cotton crop at Chakkargadh in Amreli, Gujarat was damaged by the boll worm attack and floods—the second time in two years. Growing cotton for a decade and a half, he opted for Prime Minister’s crop insurance scheme when it was launched two years ago. Harthani says he didn’t get the claim he filed for last season’s crop. And he’s not sure about this year too.

I haven’t received any money although the premium gets cut regularly. Such schemes stay on paper and never translate into anything on the ground.
Kantilal Harthani, farmer, Saurashtra

Gujarat is the largest producer of cotton in India. Harthani is among the farmers in the Saurashtra region of Prime Minister Narendra Modi’s home state who say they either didn’t get the insurance claim or weren’t adequately compensated.


‘Paid Premium, But Not Adequately Compensated’

The Gujarat region is among half the cultivated land in Asia’s third-largest economy that relies on monsoon for irrigation. The Pradhan Mantri Fasal Bima Yojana was launched in January 2016 to cover crop damage either due to deficient or excess rains. That’s because failed crops invariably push farmers under debt and, at times, even towards suicide. Already, Uttar Pradesh, Maharashtra, Karnataka and Punjab have waived loans of small farmers.

Under the scheme, insurers get 1.5 to 5 percent of the actuarial premium rate from farmers depending on the crop. The rest is equally borne by state and central governments. The Union Budget allocated Rs 10,701 crore for the year ending March.

Harthani said he pays 4 percent premium for a cover of Rs 1 lakh for his cotton crop. Emailed queries to New India Assurance, which won the tender for the kharif crop in the districts falling in the Saurashtra region, about his and other claims remained unanswered.

The scheme is just one-and-a-half-years old and some teething problems were expected, according to Joydeep Roy, partner, insurance at PwC.

Earlier, only agricultural companies bought insurance and crops were not covered fully. So from a Rs 4,000-crore industry, it has now become worth Rs 34,000 crore with efforts from the industry and the government. Insurance has to benefit the final claimant but it also needs to be looked at practically.
Joydeep Roy, Partner, Insurance, PwC

‘Crop Insurance Just Half the Problem’

Cotton farmer Bipinbhai Phokia. 
Cotton farmer Bipinbhai Phokia. 
(Photo Courtesy: BloombergQuint)

Many farmers BloombergQuint spoke to in the Amreli district of Gujarat said the scheme averages the damage instead of calculating it individually.

If I suffer 70 percent loss and the neighbouring farmers loses 30 percent crop, an average is taken and the claim is given accordingly. That’s not based on how much loss I suffer personally.
Bipinbhai Phokia, Cotton grower 

Roy said the first version of the crop insurance scheme is aimed at minimising fraud. In the absence of absolute clarity about things, certain assumptions were made for it to work, he said. “One way was averaging so that it’s fair for all. Otherwise, if one person starts doing fraud, insurance would move away from farms.”

Crop insurance is just part of the larger problem. CP Chandrasekhar, professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, said there is a basic crisis of agriculture becoming unviable because of rising costs and farmers not being compensated. “When they are hit by a weather shock, that’s on top of the basic non-viability,” he said. “It’s a double whammy.”

Perhaps that’s why Kirtibhai Choradia, a cotton grower in Amreli, sees no benefit in buying insurance.

The government has forced farmers to buy. Why should we take it if they don’t want to pay us when our crops fail?

Water Woes Leave Farmers Parched

The Narmada river in Saurashtra. 
The Narmada river in Saurashtra. 
(Photo Courtesy: Narmada Water Resources, Gujarat website)

Saurashtra, largely an agrarian economy, is dependent on monsoon for irrigation. Rains are erratic, and its inverted-saucer topography makes it difficult to conserve water. The Narmada waters were expected to bring relief to the parched region.

The Gujarat government’s Saurashtra-Narmada Avataran Irrigation(SAUNI), announced in 2012-13 when Modi was the Chief Minister, aims to take water to the region through a network of canals. About 115 reservoirs in 11 districts would irrigate more than 10 lakh acres of land through 1,126-kilometre-long four pipelines.

But progress has been slow.

Amreli has not seen any benefit of SAUNI. Some other places might have but not here. Looks like I will have to tell my son that someday water will reach our fields.
Bipinbhai Phokia, Cotton grower 

Earlier, farmers said, they could cultivate only three crops a year. Inadequate water has forced them to cut it down to one.

Prime Minister Modi inaugurated the Sardar Sarovar Dam Project on the Narmada in September 2017, ahead of the elections in the state.

The trouble about the Narmada system is that the state has completed only 68 percent of the canal system in the last 17 years, said Yoginder Alagh, chancellor at Central University Gujarat and former Union minister. “The losses are very high. Either the water circulates under the ground or goes into the sea.”

The project provides for lifting water in times of excess rainfall. “It made sense but the canal system is not completed. In a sense, SAUNI is not working. This year, farmers are not even getting entitled water.”


Queries emailed to secretary, Narmada water resources division, about the delay in building canals and water distribution remained unanswered.

Direct Benefit Transfer

The government’s Direct Benefit Transfer scheme pays the subsidy directly to companies for selling fertiliser through retail stores at lower rates to farmers. It was scheduled to roll out in Gujarat from this month.

“It hasn’t been implemented yet,” said Mohan Nakrani, a co-operative movement leader. “It’s a work in progress and will happen by next months.”

Emails to the Gujarat Direct Benefit Transfer mission about the rollout of the scheme remained unanswered.

Even if it’s rolled out soon, CP Chandrasekhar is not fully convinced about the scheme.

If the subsidy doesn’t go to farmers directly, then I don’t think it falls under Direct Benefit Transfer. Not that I am for such a scheme. I feel cash transfers anyway are problematic.
CP Chandrasekhar, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University

Moreover, cotton grower Harthani hasn’t even heard about it yet. And it’s not his immediate concern. He only wants to be compensated for his crop loss.

(This was originally published on BloombergQuint and has been republished with permission)


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