Explainer / Pradhan Mantri Fasal Bima Yojana

• The government launched a special drive to enrol more cultivators under the Pradhan Mantri Fasal Bima Yojana (PMFBY).       

• A week-long drive, starting July 1, will cover all notified areas under the Kharif 2021 season with special focus on 75 aspirational districts where crop insurance penetration is low.      

• PMFBY, launched on January 13, 2016, aims to provide a comprehensive risk solution to farmers at the lowest uniform premium across the country.     

• Launching the special drive, Union Agriculture Minister Narendra Singh Tomar said so far 29.16 crore farmers have insured their crops under the PMFBY.     

• More than Rs 95,000 crore worth of claims have been provided to farmers since the launch of the scheme, against the total premium of Rs 17,000 crore paid by them.

• However, there is a need to expand the scheme in the country so that the crop insurance coverage can be increased and more farmers get benefits.

• From getting enrolled under the scheme to ways to claim crop insurance under various circumstances to  grievance redressal and reporting crop loss, all will be explained to farmers through on-ground and digital initiatives.       

• Along with the farmers in tribal areas and aspirational districts, the campaign will engage women farmers as well.      

Pradhan Mantri Fasal Bima Yojana

• Keeping in view the risks involved in agriculture and to insure the farming community against various risks, the ministry of agriculture & farmers’ welfare introduced a crop insurance scheme in 1985 and thereafter brought improvements in the erstwhile schemes from time to time based on the experience gained and views of the stakeholders, states, farming community, etc. 

• The insurance schemes currently under implementation are the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather Based Crop Insurance Scheme (RWBCIS).

• Crop insurance aims to protect the farmer against financial losses due to uncertainties that may arise from crop failures/losses arising from named or all unforeseen perils beyond their control.

• Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched from Kharif 2016 with aim to support production in agriculture by providing an affordable crop insurance product to ensure comprehensive risk cover for crops of farmers against all non-preventable natural risks from pre-sowing to post-harvest stage. 

• The scheme also aims to cover the risk of crop yield losses of insured farmers against all non-preventable natural risks from pre-sowing to post-harvest and to provide adequate claim amount and timely settlement of claims. 

Objectives of the scheme:

• Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events.

• Stabilising the income of farmers to ensure their continuance in farming.

• Encouraging farmers to adopt innovative and modern agricultural practices.

• Ensuring credit worthiness of the farmers, crop diversification and enhancing growth and competitiveness of the agriculture sector.

• Under PMFBY, a uniform maximum premium of only 2 per cent of the sum insured is paid by farmers for all Kharif crops and 1.5 per cent for all Rabi crops. In case of annual commercial and horticultural crops, the maximum premium to be paid by farmers is upto 5 per cent. 

• The premium rates to be paid by farmers are very low and the balance of actuarial premium is being borne by the government, to be shared equally by the state & central government  to provide full insured amount to the farmers against crop loss on account of natural calamities. In Northeast states, the subsidy sharing pattern between central and state government is 90:10.

• Earlier, there was a provision of capping the premium rate which resulted in low claims being paid to farmers. This capping in earlier schemes has now been removed.

• In PMFBY farmers will get a claim against full sum insured without any reduction.

• The scheme was very well received by the farming community as 27 states and UTs opted for the scheme in one or more seasons. The coverage in the first year of the scheme (2016-17) was 30 per cent of Gross Cropped Area (GCA). 

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