Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched from Kharif 2016 with aim to support production in agriculture by providing an affordable crop insurance product to ensure comprehensive risk cover for crops of farmers against all non-preventable natural risks from pre-sowing to post-harvest stage. The Scheme has completed 8 crop seasons and is being implemented across States/ UTs.
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%.
- 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 and it has now been removed and farmers will get the claim against full sum insured without any reduction.
- Smartphones 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.
- 12% interest rate to be paid by the insurance company to farmers for delay in settlement claims beyond two months of prescribed cut off date. Similarly, the State government has to pay 12% interest rate for delay in release of State share of subsidy beyond three months of prescribed cut off date.
- Coverage for crop loss due to attack of wild animals has been initiated on pilot basis with the additional financial liabilities of this provision to be borne by the concerned State government.
Risks Covered
- Comprehensive risk insurance is provided to cover yield losses due to non-preventable risks, such as natural fire, lightning, etc.
- In cases where the majority of the insured farmers of a notified area, having intent to sowt and incurred expenditure for the purpose, are prevented from sowing the insured crop due to adverse weather conditions, shall be eligible for indemnity claims upto a maximum of 25% of the sum-insured.
- 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.
- For certain localized problems, loss/ damage resulting from occurrence of identified localized risks, affecting isolated farms in the notified area would also be covered.
Unit of Insurance
- The Scheme shall be implemented on an ‘Area Approach Basis’.
- Defined area (unit area of insurance) is village/ village panchayat level.
- In due course of time, the unit of insurance can be a geo-fenced/ geo-mapped region having homogenous risk profile for the notified crop.
- It is assumed that in a defined area, for each notified crop, the insured farmers will face similar risk exposures.
Source: PMFBY guidelines
