NEW DELHI: The Centre’s flagship crop insurance scheme , launched in the 2016-17 kharif (summer sown crop) season, has reported a 15% decline in coverage of farmers in its second year (2017-18) and one of the key reasons for this dip is the loan waiver announced by several states last year.Data on the crop insurance scheme, shared by the government in Parliament, showed that farmers’ enrolment declined from 57.3 million in 2016-17 to 48.8 million in 2017-18 with Karnataka, Rajasthan, Uttar Pradesh, Bihar and Maharashtra reporting substantial decline.Incidentally, four of these five states — Karnataka, Rajasthan, UP and Maharashtra — announced loan waiver schemes last year, affecting the footprint of the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2017-18.Giving reasons for the dip, the agriculture ministry said in its written response to a question in Rajya Sabha on Friday, “This is mainly due to factors like announcement of debt waiver scheme in Maharashtra and Uttar Pradesh, farmers’ perception of mitigated risk in 2017-18 which was a good monsoon year, de-duplication due to Aadhaar being made mandatory for coverage etc.”Records showed that UP, Maharashtra and Karnataka announced their loan waiver schemes before the cut-off date for farmers to enrol for insurance for kharif crops under PMFBY in 2017. Similarly, Rajasthan had announced it before the rabi sowing season last year.The fall in coverage in Bihar, however, can be explained by the state’s resistance to PMFBY. Though it had opted for it in 2016-17, it developed cold feet the next year after facing delay in disbursal of claims in the first year of the scheme.Figures shared by the ministry in Parliament showed that overall premium and claims under PMFBY increased in 2017-18 compared to 2016-17 despite decline in enrolment.Gross premium (shares of farmers, central government and state governments) increased from Rs 165 billion in kharif 2016 to Rs 195 billion in kharif 2017 while approved claims increased from Rs 104 billion to Rs 137 billion during the period.However, payment of claims did not increase at the same pace. Insurance companies had paid nearly Rs 102 billion to farmers as against the approved claims of Rs 104 billion for kharif 2016. But for kharif 2017, only Rs 118 billion has so far been paid to farmers against approved claims of Rs 137 billion, a clear indication that delay in disbursal has become the biggest bottleneck in successful implementation of PMFBY.Seeking to overcome this problem, the ministry has decided to bring some reforms where the insurance companies will have to pay the claim with 12% interest if they fail to clear it within two months. Even state governments will have to pay interest to farmers if they (states) delay their share of premium.