Thiruvananthapuram, Kerala: The Union Ministry of Agriculture has introduced strict measures to prevent farmers from being excluded from the crop insurance scheme. It has made it mandatory for banks to enrol farmers taking agricultural loans into the crop insurance plan. If they fail to do so, the liability to pay compensation for crop loss will rest with the banks. A directive to this effect was issued to all bank heads and NABARD on July 28.

Kerala tops the list of states with the highest number of farmers not included in the scheme. Although 45 lakh farmers in the state possess Kisan Credit Cards (KCCs), only 12,000 have been enrolled under the 2025 crop insurance coverage. As per the new directive, banks must ensure that all KCC account holders are brought under the insurance scheme. Moreover, at the time of sanctioning the loan, details of insurance must be submitted on the central government’s portal.

Since many banks failed to follow the rules, the ministry allowed farmers to register for insurance on their own. Normally, if a farmer gives an “opt-out” form while taking a loan, the bank does not need to enrol them. However, a probe by the agriculture ministry found that some banks in Kerala were misusing this rule by collecting signed opt-out forms from farmers at the time of the loan application—without the farmers officially choosing to opt out themselves.Also, many farmers are not registering by themselves.

Kerala has around 45 lakh farmers, and 27 crops are eligible under the insurance scheme. These include rubber, coconut, turmeric, paddy, banana, vegetables, mango, pineapple, pepper, and sugarcane, among others. Since the scheme's launch in 2016, farmers in the state have received Rs 600 crore in claims. However, actual losses are reportedly several times higher. Those outside the scheme have not received any compensation.

The deadline for enrolment under the scheme this year has been extended until August 31.