Pradhan Mantri Fasal Bima Yojana (PMFBY) | General Awareness for SSC CGL PDF Download

Introduction

Pradhan Mantri Fasal Bima Yojana (PMFBY), launched on January 13, 2016, by the Government of India, is a flagship crop insurance scheme aimed at providing financial protection to farmers against crop losses due to natural calamities, pests, and diseases. The scheme replaced earlier programs like the National Agricultural Insurance Scheme (NAIS) and Modified NAIS (MNAIS) to offer a more comprehensive, affordable, and accessible insurance cover for farmers. PMFBY seeks to stabilize farmers’ income, encourage modern agricultural practices, and ensure the sustainability of agriculture in India.

Objectives of PMFBY

• Financial Protection: Provide insurance coverage and financial support to farmers in the event of crop failure due to natural calamities, pests, or diseases.
• Income Stabilization: Ensure income stability for farmers to sustain their livelihoods and continue farming.
• Risk Mitigation: Encourage farmers to adopt innovative and modern agricultural practices by reducing financial risks.
• Credit Flow to Agriculture: Ensure the flow of credit to the agriculture sector by reducing the risk for financial institutions.
• Sustainable Agriculture: Promote resilience in agriculture against climate change and other uncertainties.

Key Features of PMFBY

Comprehensive Coverage:

• Covers yield losses due to natural calamities (e.g., drought, flood, cyclone), pests, and diseases.
• Includes post-harvest losses for crops kept in the field (up to 14 days after harvesting) due to specified perils like cyclones or unseasonal rains.
• Covers localized calamities (e.g., hailstorms, landslides, inundation) affecting individual farms.
• Prevents sowing/planting risks due to adverse weather conditions.

Low Premium Rates:

• Farmers pay a uniform premium of:

  • 2% of the sum insured for Kharif crops.

  • 1.5% of the sum insured for Rabi crops.

  • 5% of the sum insured for commercial and horticultural crops.

• The balance premium is shared by the Central and State Governments (50:50 in most cases, 90:10 for North-Eastern states).

Sum Insured:

• Based on the Scale of Finance, which reflects the cost of cultivation, ensuring adequate coverage.
• No cap on the sum insured, and no reduction in coverage even if premiums are subsidized.

Mandatory for Loanee Farmers:

• Compulsory for farmers availing crop loans from financial institutions for notified crops in notified areas.
• Voluntary for non-loanee farmers.

Technology Integration:

• Use of remote sensing, drones, and smartphones for Crop Cutting Experiments (CCEs) to assess yield losses.
• Geo-tagging and digital platforms for transparency in claim settlements.
• Mobile apps like the Crop Insurance App for enrollment and claim tracking.

Risk Coverage:

• Prevented Sowing/Planting: Compensation if sowing is prevented due to adverse weather.
• Standing Crop Losses: Coverage for yield losses due to natural calamities.
• Post-Harvest Losses: Coverage for crops damaged within 14 days of harvest due to specified perils.
• Localized Calamities: Compensation for individual farm losses due to events like hailstorms or landslides.

Claim Settlement:

• Claims are settled based on yield data from CCEs or weather-based indices.
• Timely settlement targeted within three weeks of yield data submission.
• Direct Benefit Transfer (DBT) for claim payments to farmers’ bank accounts.

Notified Crops and Areas:

• Crops and areas are notified by State Governments based on agro-climatic conditions and risk profiles.
• Covers food crops, oilseeds, commercial crops, and horticultural crops.

Penetration and Outreach:

• Implemented through public and private insurance companies empanelled by the Government.
• Banking correspondents, Common Service Centres (CSCs), and online portals facilitate enrollment.

Implementation Structure

Central Level:

• The Ministry of Agriculture and Farmers’ Welfare oversees PMFBY.
• The Central Government provides premium subsidies and guidelines.
• The Agricultural Insurance Company of India (AIC) and other empanelled insurers implement the scheme.

State Level:

• State Governments notify crops, areas, and sum insured.
• Share premium subsidies and coordinate with insurance companies and banks.
• Conduct Crop Cutting Experiments (CCEs) for yield assessment.

District Level:

• District-Level Monitoring Committees oversee implementation, enrollment, and claim settlements.
• Local agricultural departments and banks facilitate farmer enrollment.

Village Level:

• Farmers enroll through banks, CSCs, insurance agents, or online portals.
• Village-level CCEs assess crop yields for claim calculations.

Associated Schemes

Weather-Based Crop Insurance Scheme (WBCIS):

• A parallel scheme under PMFBY that provides insurance based on weather parameters (e.g., rainfall, temperature) rather than yield losses.
• Premium rates are similar to PMFBY, with government subsidies.

Restructured Weather-Based Crop Insurance Scheme (RWBCIS):

• An upgraded version of WBCIS with improved coverage and flexibility.

Coconut Palm Insurance Scheme (CPIS):

• A specific component for insuring coconut palms against natural and other risks.

Achievements of PMFBY

Farmer Coverage:

• As of 2023, over 30 crore farmer applications have been insured under PMFBY.

• Significant coverage in states like Maharashtra, Uttar Pradesh, and Madhya Pradesh.

Claim Disbursements:

• Over ₹1.5 lakh crore in claims paid to farmers since inception, providing critical financial support.

Premium Subsidies:

• Government subsidies have kept premiums affordable, encouraging farmer participation.

Technology Adoption:

• Use of remote sensing, drones, and mobile apps has improved transparency and efficiency in yield assessment and claim settlements.

Risk Mitigation:

• Enabled farmers to adopt modern practices like high-yielding varieties and mechanized farming by reducing financial risks.

Challenges of PMFBY

Delayed Claim Settlements:

• Delays in conducting CCEs and processing claims due to administrative bottlenecks.

• Farmers often face delays in receiving compensation.

Low Awareness:

• Many farmers, especially in remote areas, lack awareness about the scheme’s benefits and enrollment process.

Inadequate Coverage:

• Some crops and regions remain underinsured due to limited notification by states.
• Localized calamities and post-harvest losses are not always adequately covered.

High Premium Costs for Non-Subsidized Crops:

• Commercial and horticultural crop farmers face higher premiums (5%), discouraging participation.

Data and Assessment Issues:

• Inaccurate yield data from CCEs or discrepancies in weather data affect claim accuracy.
• Limited use of technology in some areas hampers efficiency.

Financial Burden on States:

• State Governments’ share of premium subsidies strains budgets, leading to delays in fund releases.

Low Penetration in Some Areas:

• Uneven coverage across states, with lower participation in North-Eastern and hilly regions.

Recent Developments and Initiatives

Revamped PMFBY (2020):

• Made the scheme voluntary for all farmers (previously mandatory for loanee farmers).
• Increased flexibility for states to select insurance companies and risk coverage models.
• Capped Central Government’s premium subsidy at 30% for unirrigated crops and 25% for irrigated crops in non-North-Eastern states.

Technology Integration:

• National Crop Insurance Portal for seamless enrollment and claim tracking.
• Use of satellite imagery, drones, and AI for faster and more accurate yield assessments.

Localized Calamity Coverage:

• Strengthened provisions for compensating individual farm losses due to localized risks.

Convergence with Other Schemes:

• Integration with schemes like PM-KISAN for better outreach and DBT for claim payments.

Focus on North-Eastern States:

• Increased Central Government subsidy (90:10 ratio) to encourage participation in North-Eastern states.

Impact of PMFBY

Economic Impact:

• Provided financial security to farmers, reducing distress due to crop losses.
• Encouraged investment in agriculture by mitigating risks.

Social Impact:

• Supported small and marginal farmers (over 85% of insured farmers) who are most vulnerable to crop failures.
• Reduced farmer suicides linked to financial distress in some regions.

Agricultural Impact:

• Promoted adoption of modern farming techniques by reducing risk-related hesitancy.
• Improved resilience against climate change and unpredictable weather patterns.

Financial Sector Impact:

• Strengthened agricultural credit flow by reducing risks for banks and financial institutions.

Monitoring and Evaluation

Online Portals:

• National Crop Insurance Portal tracks enrollment, premiums, and claims.
• Real-time monitoring of CCEs and claim settlements.

Third-Party Audits:

• Independent agencies verify CCE data and claim processes for transparency.

Grievance Redressal:

• Toll-free helplines and online portals for farmers to address complaints.
• District-level grievance committees resolve disputes.

State-Level Monitoring:

• State Governments and insurance companies coordinate to ensure timely implementation and claim settlements.

Conclusion

Pradhan Mantri Fasal Bima Yojana is a transformative scheme that provides a safety net for farmers by insuring their crops against unpredictable risks. With affordable premiums, comprehensive coverage, and technology-driven implementation, PMFBY has supported millions of farmers, particularly small and marginal ones, in sustaining their livelihoods. Despite challenges like delayed claim settlements and low awareness, the scheme’s focus on risk mitigation, financial inclusion, and agricultural resilience has made it a critical pillar of India’s agricultural policy. Continued improvements in technology, outreach, and state coordination will further strengthen PMFBY’s impact on Indian agriculture.