PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY)

PMFBY launched in 2016 is a large-scale crop subsidy insurance scheme that was aimed to safeguard farmers.

OBJECTIVE: Pradhan Mantri Fasal Bima Yojana (PMFBY) aims for supporting sustainable production in agriculture sector by way of

1. Providing compensation to farmers suffering crop loss/damage arising out of unforeseen events i.e expand penetration of crop insurance,

2. Stabilizing the income of farmers to ensure their continuance in farming,

3. Encouraging farmers to adopt innovative and modern agricultural practices,

4. Ensuring flow of credit to the agriculture sector;

which will attribute to food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from production risks. It operates under the motto of ‘One Nation, One Crop, One Premium’.

COVERAGE UNDER THE SCHEME:

FARMERS
    • All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage.
    • The scheme is voluntary for all farmers (post kharif 2020 season) , including loanee farmers. (Earlier compulsory for loanee).
    • Special efforts are made to ensure the maximum coverage of SC/ST/Women farmers under the scheme. Budget allocation and utilization under these segments of farmers should be in proportion to SC/ST/General along with gender (Male/Women) land holding in the respective state/cluster.
    • Panchayat Raj Institutions (PRIs) may be involved at various stages of implementation of crop insurance schemes particularly in the identification of the crops & beneficiaries, extension & awareness creation amongst farmers, obtaining feed-back of the farmers while making assessments.
CROPS
    • Food crops (Cereals, Millets & Pulses),
    • Oilseeds
    • Annual Commercial / Horticultural crops
RISKS & EXCLUSIONS
    • Prevented Sowing/Planting Risk: Insured area is prevented from sowing/ planting due to deficit rainfall or adverse seasonal conditions.
    • Standing Crop (Sowing to Harvesting): Comprehensive risk insurance is provided to cover yield losses due to non- preventable risk, such as Drought, Dry spells, Flood, Inundation, Pests & Diseases, Landslides, Natural Fire & Lightening, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado etc.
    • Post-Harvest Losses: coverage is available only up to a maximum period of two weeks from harvesting for those crops which are allowed to dry in cut & spread condition in the field after harvesting against specific perils of cyclone & cyclonic rains and unseasonal rains.
    • Localized Calamities: Loss / damage resulting from occurrence of identified localized risks of hailstorm, landslide, and Inundation affecting isolated farms in the notified area.
    • General Exclusions: Losses arising out of war & nuclear risks, malicious damage and other preventable risks shall be excluded.

SALIENT FEATURES:

    • Centrally sponsored scheme
    • Comprehensive crop insurance scheme from pre-sowing to post-harvest.
    • States can setup their own insurance companies.
    • Aadhaar is made mandatory.
    • It is open for both loanee and non-loanee farmers.
    • Concept of Area Approach: The Scheme shall operate on the principle of “Area Approach” in the selected Defined Areas called Insurance Unit (IU). State Government /UT will notify Crops and Defined Areas covered during the season. State/UT Government will notify as an insurance unit, Village/Village Panchayat or any other equivalent unit for major crops. For other crops it may be a unit of size above the level of Village / village Panchayat.
    • Premium paid by the Farmer: The Actuarial Premium Rate (APR) would be charged under PMFBY by implementing agency (IA). The rate of Insurance Charges payable by the farmer are as:
Season

Crops

Maximum Insurance charges payable by farmer (% of Sum Insured)
Kharif

All foodgrain & Oilseeds crops,(all Cereals, Millets,Pulses, & Oilseeds crops)

2.0% of SI or Actuarial rate, whichever is less

Rabi

All food grain & Oilseeds crops, (all Cereals Millets, Pulses, & Oilseeds crops)

1.5% of SI or Actuarial rate, whichever is less

Kharif & Rabi

Annual Commercial / Annual Horticultural crops

5% of SI or Actuarial rate, whichever is less

Central Subsidy:

    • 30% for unirrigated areas/crops
    • 25% for irrigated areas/crops (districts having 50% or more irrigated area will be considered as irrigated area/district)
    • 90% for North Eastern States

BENEFITS:

    • It provides comprehensive insurance coverage for Kharif and Rabi crops.
    • There is provision for add on coverage available in specific circumstances.
    • It provides freedom to farmers as optional for both loanee and non-loanee.
    • It ensures stability in the income of farmers so that they can continue farming.

CHALLENGES:

    • There are prevailing gender gaps in registration.
    • There is lack of awareness and poor reachability especially among the small and marginal farmers in rural areas.
    • During the survey it was found that the campaign was done at the block level on a market day. So, only those farmers who attended market were exposed to the campaign.
    • There is lack of manpower and hard pressed for extension related activities, so scope for Agriculture extension officers using their services is limited.
    • End users i.e. the farmers have very little understanding of the process. Small and marginal farmers are mostly illiterate and can’t read / understand the technicalities of the scheme.
    • Survey of the damaged crop / Claim settlement process is often biased to avoid the claim process.

ACHIEVEMENTS:

    • It is the largest crop insurance scheme in the history of independent India and globally, the third largest scheme in terms of premium.
    • According to the estimates of Budget 2024, crop insurance has been given to 40 million farmers, under PM Fasal Bima Yojna.
    • 19 crore farmer applications have insured their crops under the PMFBY since 2016.
    • According to Ministry of Agriculture and Farmers Welfare, enrolment under PMFBY has increased by 27% in financial year 2023-24 so far.
    • There has been a increase of 70% in non-loanee area in 2022-23 from 2021-2022.

WAY FORWARD:

Adequate publicity needs to be given in all the villages of the notified districts/ areas. All possible means of electronic and print media, farmer’s fair, exhibitions including SMS messages, short films, and documentaries shall be utilized to create and disseminate awareness, benefits and limitations of the Scheme among the cultivators and the agencies involved in implementing the Scheme.

Insurance Week/Fasal Bima Saptah’

A mass awareness campaign, observed by ministry twice every year. The main aim is to increase farmers’ enrollment and create massive awareness on crop insurance.

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