Farmers’ and Fishermen’s Pensions : Do they Realise their Objectives?
October 21, 2008
The month of October commemorates two significant international days, that of children and of the elderly. These commemorations within the same month were perhaps intended to highlight that while childhood celebrates the promise of life , the elders are fast reaching their final destination. According to the findings of a research project on the elderly in Sri Lanka it has been stated that the population aged 60 years and older will increase to 18 per cent by 2020 and to 27 per cent by 2040.
In fact sometimes when we see the elderly sitting alone on the porch of a wattle and daub hut gazing out to the sea or the land that once provided them with an income one is reminded on the words of Eliot ‘ We are the hollow men , we are the stuffed me leaning together , headpiece filled with straw. Alas!’ There is no universal state pension scheme available to the elderly who are in the informal sector. In fact almost 72% of the working age population does not have any such schemes. In 1987 and 1990 the Farmers’ and Fishermen’s Pension and Social Security Benefit Schemes were established by successive acts of legislation in 1987 and 1990. Farmers and fishermen comprise 25-30 per cent Most of them are self-employed, with income that is usually seasonal and subject to many factors beyond their control. The objectives were to provide a minimum level of social security and provision in old age for workers, who had no access to other formal schemes. Both Schemes are administered by the Agricultural and Agrarian Insurance Board (AAIB), with overall supervision provided by the Ministers in charge of Agriculture and the Department of Fisheries.
The Farmers’ Pension Scheme targets farmers whose main source of income is agriculture including livestock farming, with some exclusions .The Fishermen’s Scheme targets fishermen. Both schemes restrict enrolment to those aged between 18-59 years. Both occupations involve hard physical work, but many continue working beyond the age of 60 years. The objectives of this scheme were to provide a minimum level of social security and provision in old age for workers, who had no access to other formal schemes. Both Schemes are administered by the Agricultural and Agrarian Insurance Board (AAIB), with overall supervision provided by the Ministers in charge of Agriculture and the Department of Fisheries.
In both Schemes, contributions are fixed-level payments which do not change once set, according to the age at enrolment, and must be made twice yearly in the Farmers’ Scheme, and quarterly in the Fishermen’s Scheme. They range from Rs. 260/= per year if enrolling at age 18 to Rs. 1,380/= per year if enrolling at age 59. To receive the final benefits, members make all contributions, although considerable leeway is provided for defaulters to make good their payment history. Members must maintain contributions up to the age of 60 years, when they are entitled to receive a pension.
The major benefit in both schemes is the pension, in addition to which some disability benefits such as gratuity and disability pensions are provided. The pension is a monthly payment, the level of which is fixed at the time of enrolment. According to the schedules in Schemes, the earlier the age of enrolment, the lower the fixed-level contributions, and the higher the ultimate pensions. In the Farmers’ Scheme, the fixed level pension varies from Rs. 1,000/= per month to Rs. 4,167/= per month. For the Fishermen’s Scheme, it varies from Rs. 1,000/= per month to Rs. 4,167/= per month. Contribution collection is decentralized, and has in part been delegated to other government agencies, including the Postal Department. Both schemes mainly rely on field officers or from government departments to collect contributions. Collected contributions are paid into separate pension and social security funds maintained by AAIB. Most funds are invested in deposits at state banks or in Treasury Bills, with the AAIB required to follow the advice of the Finance Minister in making investments
However both these pensions schemes have not had the response expected, the Farmers’ Scheme has enrolled 675,000 members out of approximately 1.2 million farmers and the Fishermen’s Scheme only 48,000 out of an estimated eligible 115,000 In addition, approximately 30-40 per cent of members in both schemes have defaulted. Since farmers and fishermen are often low and irregular income earners they find it difficult to contribute regularly.
Since it is imperative that the elderly have at least a basic income to survive, it may be necessary to review these schemes and create greater awareness and publicity of their benefits to elders especially in view of the changing economic and traditional conditions for after all from where could an old man get even the Rs 10 he needs to buy some betel ? Further the collection of the contributions should be streamlined and a specific officer appointed to the Divisional Secretariat who should make the necessary arrangements for collections. The cost of living and the prevailing inflation should be reflected in the payments made to the contributors It appears that at present only a half hearted attempt is made to popularize these schemes which are in a sense essential.
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