Pradhan Mantri Fasal Bima Yojana (PMFBY) is India's crop insurance scheme that provides financial support to farmers suffering crop loss/damage from natural calamities. It offers affordable premiums of 2% for kharif crops, 1.5% for rabi crops, and 5% for annual commercial/horticulture crops. The scheme covers yield losses and post-harvest losses up to 14 days. It aims to stabilize farmer incomes, encourage modern farming practices, and ensure credit flow to agriculture. However, questions remain around its high costs and ability to effectively implement promised protections for farmers.

1. PRADHAN MANTRI FASAL
BIMA YOJNA

2. Introduction
 Agriculture in India is wholly depends on nature. Crop insurance scheme has
been implemented to protect the farmers from perils of nature. This program
has been approved by cabinet ministry and started to help farmers to get crop
insurance at lower premium rate. It was launched by prime minister Mr.
Narendra Modi on 18 February 2016 in a Kisan MahaSammelan at Sehore
Madhya Pradesh, to help the farmers and which can help to boost agricultural
production. This scheme will replace National Agricultural Insurance Scheme
(NAIS) which is started in 1999.

3. Important features of PMFBY
 It is the biggest ever government contribution to a crop insurance program.
 Government will bear largest ever financial burden even if the government
share exceeds 90%.
 Farmers will have to pay lowest premium rate.
 There will be one premium rate for each season for all food grains
 Premium for kharif - 2% rabi – 1%.
 Farmers will get full insurance cover.

4.  It is for the first time the post harvest losses arising from cyclones and unseasonal rains have been
covered nationally.
 For the first time emphasis has been given to mobile and satellite technology to facilitate accurate
assessment and quick settlement of claims.
 New scheme removes the previous capping on premium.
 Use of simple and smart technology in farming

5. Highlights of the scheme
 There will be a uniform premium of only 2% to be paid by farmers for all Kharif
crops and 1.5% for all Rabi crops. In case of annual commercial and
horticultural crops, the premium to be paid by farmers will be only 5%. The
premium rates to be paid by farmers are very low and balance premium will be
paid by the Government to provide full insured amount to the farmers against
crop loss on account of natural calamities.
 There is no upper limit on Government subsidy. Even if balance premium is
90%, it will be borne by the Government.

6.  Earlier, there was a provision of capping the premium rate which resulted in low claims being paid
to farmers. This capping was done to limit Government outgo on the premium subsidy. This
capping has now been removed and farmers will get claim against full sum insured without any
reduction.
 The use of technology will be encouraged to a great extent. Smart phones will be used to capture
and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing
will be used to reduce the number of crop cutting experiments.
 PMFBY is a replacement scheme of NAIS / MNAIS, there will be exemption from Service Tax
liability of all the services involved in the implementation of the scheme. It is estimated that the
new scheme will ensure about 75-80 per cent of subsidy for the farmers in insurance premium.

7. PROVISION OF BUDGET UNDER
PMFBY
 The Pradhan Mantri Fasal Bima Yojana (PMFBY) has received an additional
impetus with the government allocating Rs 9000 crore for the scheme. In 2016-
17, they were allocated Rs 5500 crore. Finance minister Arun Jaitley in his
Budget speech said that the coverage under the scheme will be increased to 50
percent of cropped area in 2018-19,

8. Crops covered under this scheme
 Under this new crop insurance plan , the premium rates will be discounted from
the existing rates for all types of crops like Kharif crops , Rabi crops ,
horticulture crops and commercial crops important features below
 The Rabi crops include wheat , barley , oats , gram, linseed , mustard etc
 The Kharif crops include rice , maize ,sorghum , pearl millet/ bajra, finger millet /
ragi (cereals) , arahar (pulse), soyabean, groundnut (oilsseds), cotton etc.

9. Farmers to be covered
 All farmers growing notified crops in a notified area during the season who have
insurable interest in the crop are eligible.
 Compulsory coverage : The enrolment under the scheme, subject to
possession of insurable interest on the cultivation of the notified crop in the
notified area, shall be compulsory for following categories of farmers
 Farmers in the notified area who possess a Crop Loan account/KCC account
(called as Loanee Farmers)-

10.  to whom credit limit is sanctioned/renewed for the notified crop during the crop season.
 Such other farmers whom the Government may decide to include from time to time.
 Voluntary coverage :
Voluntary coverage may be obtained by all farmers not covered above, including Crop KCC/Crop
Loan Account holders whose credit limit is not renewed.

11. Risk covered under the scheme
 Yield Losses (standing crops, on notified area basis). Comprehensive risk
insurance is provided to cover yield losses due to non-preventable risks, such
as Natural Fire and Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest,
Hurricane, Tornado. Risks due to Flood, Inundation and Landslide, Drought, Dry
spells, Pests/ Diseases also will be covered.
 In post-harvest losses, coverage will be available up to a maximum period of 14
days from harvesting for those crops which are kept in “cut & spread” condition
to dry in the field.

12.  For certain localized problems, Loss / damage resulting from occurrence of identified localized
risks like hailstorm, landslide, and Inundation affecting isolated farms in the notified area would
also be covered.

13. Objectives
 To provide insurance coverage and financial support to the farmers in the event
of failure of any of the notified crop as a result of natural calamities, pests &
diseases.
 To stabilize the income of farmers to ensure their continuance in farming.
 To encourage farmers to adopt innovative and modern agricultural practices.
 To ensure flow of credit to the agriculture sector.

14. Disadvantages and flaws of PMFBY
 The total expenditure for this insurance scheme is about 9500 Crore which is
mere waste. The premiums are very much lower for the farmers but it is difficult
to provide the promises by the government.
 As the post harvest losses are available up to the maximum of 14 days, those
crops needed to be maintained for inspections by respective officials in order to
process the claim procedure.
 There are certain notified crops which are considered under this crop insurance
scheme and the insurance coverage will be beneficial only if the farmers
planted those specific crops in their field.

15.  Though, the claim will be settled properly into the bank account of the farmers. However, there’s
only one insurance company is available for this scheme for the entire state, which may affects
cash flow.

16. Conclusion
 Success of any government scheme depends on its sincere implementation.
The key problem such as poor land records, flawed land titles, corruption etc
are common challenges any crop insurance scheme in India face. Further the
success of the scheme is depends on how sincerely it is implemented by the
insurance companies. Further we need to wait and watch as to how the scheme
is monitored and supervised