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Karnataka model that may be a step forward in tackling the epidemic of crop insurance scams

Karnataka model that may be a step forward in tackling the epidemic of crop insurance scams
It may well have been a scene straight out of a 1970s art movie. In a poverty-stricken, drought-prone district where getting two meals a day is a luxury for most, a politician has milked nearly Rs 500 crore over seven years from schemes meant for desperate farmers. He has not invested even a paisa and, while farmers go from pillar to post hoping for some succour, he sits pretty on his pile of cash, sometimes offering a small cut to some farmers who give up hope, integrity and  identity for the pittance he hands out.

Everyone knows what he has done and what he is doing. But there is no paper trail to identify or trap him. He has got away scot-free. The district administration has given up, the banks and insurance companies he defrauded have given up and there is no one to hear the pain of the farmer, in whose name government benefits have poured in but eaten away by the politician.
Unfortunately, this is not a movie, but a tale straight from Jewargi in backward Kalaburagi district of Karnataka. From 2009 to March this year, a politician, now with an opposition party in the Congress-governed state, was one of the directors of a district cooperative bank. He woke up to loopholes in crop insurance schemes for farmers who have lost everything to drought, pests, floods and other calamities. He diverted bank money through various means, paid premiums for farmers who were not even aware of the scheme and even fictitious people. In connivance with local insurance and bank officials, he showed huge crop losses in the area even during good years and made a killing.
Farmers who were actually in distress, several of whom had signed up for crop insurance and paid premium, got ripped off in the process. Insurance companies, faced with huge claims, discounted the payout all across and genuine farmers got much less than their due; while the politician and his cronies made huge gains.
“Due to such scams, the farmers don’t have confidence in crop insurance schemes,” says Rajeev Chawla, principal secretary, horticulture, Karnataka, who has determinedly set out to address the problem that has haunted the country ever since crop insurance was thought of in the 1970s.

Over the years, several reports have been submitted by agriculture, government and insurance experts that point to serial scams in states like Maharashtra (Aurangabad and Jalgaon), Gujarat (Saurashtra), Andhra Pradesh (Rayalaseema), Karnataka (Dharwad and Haveri), Tamil Nadu (Nagapattinam and Sivaganga) and Telangana (Mahbubnagar), which are said to be better at “harvesting insurance claims” than crops.
The situation is begging for scams: currently, no one knows what crop a farmer is growing.
No one knows whether he or she is even growing anything at all. The banks lending the crop loan and the companies insuring the crop have no data on whether he/she owns the land for which they are given. Further, the insurance claims are processed much after the crop has been harvested and there is no way to verify whether there was damage or not. All of it is done on hearsay, assurances and blind trust, which have been drastically misused for over four decades. In this scenario most farmers don’t opt for crop insurance that is supposed to protect them, due to lack of both awareness and trust in the system.

All involved, however, admit that crop insurance is essential, given that monsoons are failing with increasing regularity, leading to severe financial stress in the agriculture sector. Karnataka has seen three continuous drought years, with farmers committing suicide or giving up agriculture altogether. If 2015 saw about 1,200 farmers kill themselves in the state, the figure from April to October this year, also a severe drought one, is 457.
“Crop insurance could have saved them some of this distress. We tried to push it through banks and agriculture department, but farmers are difficult to convince, particularly due to the lack of transparency in the system,” Agriculture Minister Krishna Byre Gowda told ET Magazine.

Recommendations were made by the PK Mishra committee in 2014 and the Indian Council for Agricultural Research (ICAR) to counter the problem and an effort is now being made to ensure that the latest nationwide crop insurance scheme, the Pradhan Mantri Fasal Bima Yojana, launched by PM Narendra Modi at Karnataka’s Belagavi  in  February this year, is better implemented. While various state are figuring it out, Karnataka has stolen a march by putting in place a model on how to do it, which is being closely watched by the Centre for replication across the country.

Driven by Chawla and minister Gowda, a GPS-based system called Samrakshane (total protection) is tracking crop right from sowing through growth up to cutting in as many sample fields as possible. What gives Samrakshane an edge is that Karnataka, unlike other states, digitised its land documents in 2001 itself, through the Bhoomi project, which Chawla implemented as secretary of e-governance. A World Bank paper in 2001 acknowledged his work, saying: “Implementation of land record computerisation  ..
Bhoomi succeeded because there was a champion who worked a 15-hour day for over 12 months, devoting 80% of his time to the project. Minimising resistance from staff by harnessing political support was an important contributory factor. Extensive training coupled with a participatory style also helped to diminish resistance.”

Chawla has applied the same zeal to make Samrakshane software for crop insurance work effectively. Samrakshane links Bhoomi to bank records of loanee farmers and assesses crop position and damage through staff carrying GPS-equipped smartphones to take pictures and videos of the fields at various stages, for which loans and insurance cover have been given. The fields are randomly selected by statistics department officials and the ground staff get to know of which field they need to go to only upon assignment.

The photos and videos taken are uploaded in almost real-time, with the staff, who are authorised to oversee the process, also pictured in them; this ensures they have personally visited the sites. The Samrakshane website also links up the insurance companies, along with bank accounts of farmers, leading to quick monetary e-transactions, transparency, creation of digital records and accountability. “Through Samrakshane, we will know whether the farmer applying for the bank loan actually owns his land. We will know whether he has sown the crop for which he took the loan and the insurance. We will know if the crop actually failed and also the extent to which it has failed. So the assessment will be as transparent as possible and insurance settlement can be done quickly without the kind of delays we are seeing now,” explains Chawla.
Gowda sees greater use for the Samrakshane software. “Data is gathered, through GPS-based recording with photographs and videos, of different stages of crop and cropcutting experiments in randomly picked sample fields that the staff has no prior knowledge of. This information is useful not just for crop insurance but for all agriculture-related data,” he said.
Farmer leader GC Byya Reddy welcomes the project, but feels that it might not be effectively implemented due to the lack of field staff. The horticulture and agriculture department has trained 14,000 staff drawn from their own as well as from rural development and panchayat raj and revenue departments on Samrakshane. Reddy, however, thinks these numbers are inadequate to the task in hand.

“Each taluk in Karnataka has 5-6 revenue hoblis, each covering about six gram panchayats, each of which has 15-18 villages under it. There are Raitha Samparka Kendras (farmer connect centres) in each hobli, which have to cover nearly 80 villages. There is just one officer with about three staff members to cover this entire segment. Is it humanly possible for them to actually go to the fields and record crop loss?” Reddy asks. The 14,000 additional staff would also be inadequate for the kind of documentation that Gowda and Chawla are looking for, contends Reddy. “The intention is good, but it will need at least twothree people in each panchayat to implement it correctly,” he says.

Chawla admits to a shortage of staff, but points out that the project has worked well in kharif 2016, which has just got over. Horticulture is hiring about 1,500 excess staff, while a call centre has been set up for farmers to make queries, raise issues and understand the process of insurance.

“We certainly need to increase awareness levels so that the number of farmers we are covering under insurance increases,” Gowda says. “We hope that by bringing in transparency and through prompt and accurate payment of insurance, more farmers will come into the fold.” In the just completed kharif season, hardly 11% of Karnataka’s farmers were covered, but both Chawla and Gowda feel the trust levels are increasing.
In line with the recommendations made by the Mishra Committee and the ICAR, Karnataka has also worked with the Mahalanobis National Crop Forecast Centre and used satellite imagery to see the varying crop situation for cotton and paddy. “We couldn’t do it for other crop as monsoon clouds were obstructing the satellite. Drones have also been suggested by the committee, but that is a very expensive proposition,” says Chawla






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