PMFBY – Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana (PMFBY) is a crop insurance scheme launched by the Central Government. It renders an extended coverage to under localised risks, post-harvest losses, etc., focuses on generalising technology for estimation of crops and of course, encouraging crop insurance. 

The scheme has replaced all the other crop insurance schemes in India. Nonetheless, it has assimilated the best features of all the existing schemes and also focused on unfastening the shortcomings. 

Objectives of the scheme

PMFBY functions  under the primary objective of assisting the farmers in protecting their crops. The prime objectives of the scheme include-

• Provision of insurance coverage and financial assistance to the farmers against failure/loss/damage of any of the notified crops because of some natural calamities, pests & diseases.
• Ensuring stability in the income of the farmers so that they are able to continue with farming.
• Encouraging the farmers to adopt innovative & modern agricultural methods of farming.
• Ensuring credit flow in the agricultural sector.

Features of Pradhan Mantri Fasal Bima Yojana

• This scheme will replace the National Agricultural Insurance Scheme (NAIS) and the modified NAIS.
• The scheme involves premium payments by the farmers in favour of PMFBY-
  1. In case of all Kharif crops, 2% of the Sum insured or Actuarial rate (whichever is less) is paid by the farmers
  2. In case of all Rabi crops, 1.5% of the sum insured or Actuarial rate (whichever is less) is paid by the farmers.
  3. In case of annual commercial and horticultural crops, 5% of the sum insured or Actuarial rate (whichever is less) is paid as premium.

Note: Actuarial Rate is the estimated value of the future losses of the insurance company. This helps in determining the lowest premium which meets all the required objectives of the company.

• The applicable farmer’s share of premium as quoted above is paid by the farmer. However, in case the Actuarial premium is more, the government is obliged to provide subsidy equal to the difference between Actuarial premium and premium paid by the farmer so as to provide full insured amount to the farmers. Also, the maximum limit on subsidy is not defined by the government.
• Initially, there was a maximum limit to the premium rate to limit the Government from surpassing on the premium subsidy. This maximum limit is now removed because it led to low claims being paid to farmers. Now, the farmers will get full claim against the entire sum insured with no reductions.
• The scheme ensures better insurance coverage by providing protection against pre-sowing losses, post-harvest losses because of cyclonic rains and unseasonal rainfall in India.  
• There are several new innovative techniques and tech-driven facilities such as satellite imagery, vegetation indices, etc. which the scheme foresses for the assistance of farmers. This is adjacent to use of smartphones for the purpose of increasing speed and accuracy during crop estimation.

Farmers which are covered under the scheme

All the farmers who are growing notified crops in the notified area during the season and have insurable interest in the crop are covered under PMFBY.

• Compulsory Coverage: All Farmers in the notified area who have taken  a crop loan account from a co-operative bank or society/KCC account under which the credit limit is approved/renewed for the notified crop during the crop season and the ones availing Seasonal Agricultural Operations (SAO).
• Voluntary Coverage: Voluntary coverage of the scheme can be obtained by all those farmers which are not covered in compulsory coverage, including crop KCC/Crop Loan Account holders whose credit limit is not renewed.

Risks Covered under PMFBY

All crops are prone to risks. Here are the risks resulting in loss of crops covered under the scheme-

1. 1. Standing Crop: Yield Loss due to Non-preventable risks such as-
      1. Natural fire
      2. Lightning
      3. Storm, Hailstorm, Typhoon, Hurricanes, Tornado, etc.
      4. Flood, Landslides and Inundations
      5. Drought and Dry spells
      6. Pests/Diseases, etc.
   2. Prevented Sowing/Planting Risk: In this case, where most of the insured farmers of a notified area are prevented from insured crop sowing or planting because of deficit/adverse rainfall and thereby, up to 25% of the sum insured is payable to the farmers as indemnity claims.

• Post-Harvest Losses: Insurance cover for a maximum period of 14 days is available for the crops which are cut & spread to dry in the field post-harvesting, against cyclone/cyclonic rains, unseasonal rains in the country.
• Localised Calamities: Coverage from losses which occur due to some identified localised risks- hailstorms, landslides, inundations which eventually affected isolated farms in the notified area.

Excluded Risks

Following are the risks to crops which are excluded/not covered:

1. Wars and nuclear risks
2. Malicious damage
3. Riots
4. Theft and Act of enmity
5. Grazed and/or destroyed by domestic or wild animals

Inclusions under Scheme Activity Calendar

• The loaning period, in which the loan is sanctioned, for farmers who took loans-
  • Kharif crops: April to July is
  • Rabi crops: October to December
• Cut-off date for receipt of Proposals of farmers (for the ones who have taken loan as well as for the ones without loan)-
  • Kharif crops: 31st July
  • Rabi crops: 31st December
• Cut-off date for receipt of crop data–
  • Within a month from the date of final harvest for both Kharif as well as Rabi crops

Revised Guidelines for Pradhan Mantri Fasal Bima Yojana (PMFBY)

In 2018, the government modified the existing guidelines for PMFBY. New provisions in the scheme include-

• Penalties: 12% interest rate is paid by the Insurance Company to the farmers against delays in settlement of claims for more than two months from the dictated cut off date. Likewise, the state government is obliged to pay 12% interest rate in case of more than three months delay in release of subsidy share from the given cut off date by the Insurance Companies.
• Loss/Damage in crops due to attack of wild animals will have an additional coverage on pilot basis with some financial liabilities borne by the respective state governments.
• Cloud burst and natural fire will be included in localised calamities.
• Hailstorms will be included in post-harvest losses.
• Introduction of district wise crop wise calendar for major crops to decide cut-off date for enrolment.

How to apply for Pradhan Mantri Fasal Bima Yojana?

Farmers who have taken loans from banks or co-operative societies can enrol through the same bank. And, farmers who have taken no loans can apply through banks, brokers, CSC e-Governance Services India Limited or directly through the website. To apply for online crop insurance under PMFBY, follow the given steps-

1. Visit PMFBY Website
2. Click on ‘Farmer Corner’
3. If you are already registered, you can proceed to get enrolled under the scheme. However, new farmers will have to register themselves by filling the registration form.