Agricultural insurance in India provides financial protection to farmers against various risks and losses incurred due to unforeseen events like natural disasters, pests, and diseases.
Brief History
Introduced in 1985, the Comprehensive Crop Insurance Scheme marked the beginning of crop insurance in the country. Subsequent schemes, such as the National Agricultural Insurance Scheme (NAIS) in 1999, Weather-Based Crop Insurance Scheme (WBCIS) in 2007, and Modified NAIS in 2010, aimed to enhance coverage and efficacy. However, these schemes faced limitations like low coverage, high premium rates for commercial crops, and delayed claim settlements, prompting the need for a more effective solution.
Pradhan Mantri Fasal Bima Yojana (PMFBY)
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- It was launched in 2016.
- It aims to address the drawbacks of previous schemes. It operates on the principle of “One Nation-One Scheme” and is implemented by the Ministry of Agriculture & Farmers Welfare.
- The scheme provides comprehensive coverage from pre-sowing to post-harvest losses against natural and non-preventable risks such as drought, flood, pests, and diseases.
- Hailstorm has been included in post-harvest losses, besides unseasonal and cyclonic rainfall. Further, cloudburst and natural fire have been included in the localised calamities in addition to landslide and inundation.
- Unlike previous schemes, PMFBY is open for both loanee and non-loanee farmers. It covers food crops (cereals, millets and pulses), oilseeds as well as horticultural crops.
Key Features of PMFBY
Coverage: Increased from 23% to 50% of the Gross Cropped Area (GCA).
Premium Rates: Farmers pay 2% for Kharif crops, 1.5% for Rabi crops, and 5% for commercial and horticultural crops, with the balance shared between the central and state governments.
Voluntary Participation: Enrolment is voluntary for all farmers, providing them with the flexibility to choose additional risk covers.
Benefits and Challenges
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- Benefits: Comprehensive risk coverage, low premium rates, and improved claim settlement processes.
- Challenges: Low coverage in certain states, delays in premium payment by state governments, and issues in timely claim settlements.
The Union Budget 2024-25 allocated ₹14,600 crore for PMFBY, highlighting the government’s commitment to strengthening agricultural insurance and ensuring farmers’ welfare. It has benefited more than 4 crore farmers till March 2024.
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