Paid ₹30,000 in premiums, lost ₹7 lakh in crop damage, but received just ₹1,274 in compensation
During the 2024 Kharif season, soybean crops across Khandwa district were devastated by drought. Among the worst affected was Rajendra Prajapati, a farmer from Mordar village, whose 21-acre soybean crop was completely destroyed, leaving him without a single grain to harvest.
Prajapati had paid ₹6,000 as his share of the crop insurance premium, while central and state governments together added another ₹24,000, making the total premium ₹30,000. Despite this, he received only ₹1,274 as compensation from HDFC Insurance.
Calling the amount “absurd,” Prajapati has decided to return it by sending a demand draft to Prime Minister Narendra Modi, alleging that the government and insurers have defrauded farmers under the crop insurance scheme.
“Government accepted my crop loss, yet gave ₹1,274”
“The government and insurance company themselves accepted that my crop was damaged. But how can a payout of just ₹1,274 be justified against my losses?” Prajapati asked.
He explained that the expected yield from his 21 acres would have been about 140 quintals of soybean (7 quintals per acre). At a mandi rate of ₹5,000 per quintal, the crop value stood at ₹7 lakh. Even accounting for more than 50% loss, he estimated his rightful claim should have been at least ₹3.4 lakh — not the paltry amount credited to his account.
Prajapati, who owns 25 acres of ancestral land, usually grows wheat and soybean. In 2024, drought completely wiped out his soybean crop despite an insurance survey being carried out and a Kisan Credit Card loan linked to the policy.
Other farmers face the same problem
Prajapati is not alone. Several farmers in Khandwa reported similar experiences:
Anil Kanhaiyalal (Attar village): Paid ₹4,570 premium for 15 acres, received just ₹1,387.
Haresingh Chauhan (Rohini village): Paid ₹5,500 premium (₹27,500 with govt contributions) for 17 acres, but got only ₹2,575 spread across 10 plots — with some plots receiving as little as ₹19 or ₹25 despite total crop loss.
Ganglal, Kamalchand Natthu, Shubham Kamalchand, and Rakesh Natthu: Paid between ₹1,200 and ₹2,400 each, but received negligible or no compensation.
Trilokchand Patel, Minister of the National Farmer-Labor Union, also said he insured his 2024 Kharif crop for ₹2,650 but received no payout at all. He alleged that “the scheme has become a fraud due to collusion between the government and insurance companies.”
Technical issues and partial payouts
Insurance amounts for failed crops from the previous year were recently transferred in bulk to farmers’ accounts with a single click. However, many farmers found the payout to be lower than even their premium, while others received nothing.
According to officials, around ₹3.5 crore has been disbursed to farmers in Khandwa, but “technical issues” have caused discrepancies. Complaints have been lodged with the Collector and Chief Minister, and inquiries are said to be underway.
Rahul Soni, District Manager of PMFBY, admitted that reduced claims were due to technical problems and assured that pending claims are still being processed.
Farmers accuse government of betrayal
Farmer organizations argue that the scheme, meant to protect livelihoods, has instead become an instrument of exploitation.
“Both farmers’ contributions and government funds are being misused,” said Jai Patel, spokesperson of the United Farmers Organisation. “The insurance scheme has turned into a tool of deception.”
How the PM Crop Insurance Scheme works
Farmers pay 2% premium for Kharif crops, 1.5% for Rabi crops, and 5% for commercial/horticultural crops.
The central and state governments equally share the remaining premium.
For example, a ₹4,000 Kharif premium would require the farmer to pay just ₹800, while ₹1,600 each comes from the Centre and state.
Farmers must report crop loss within 72 hours through toll-free number 14447, after which surveyors and officials assess damage and prepare a report. Claims are settled based on this.
Farmers demand transparency and fair compensation
In Khandwa, around 80,000 farmers are insured under PMFBY. Of these, 10,408 farmers have so far received ₹3.5 crore in payouts — though amounts vary widely, from ₹1.5 lakh to as little as ₹19.
Outraged farmers like Prajapati, Kanhaiyalal, Chauhan, and Patel are now demanding full transparency, timely disbursal, and accountability from both the government and insurers to restore faith in the crop insurance program.