Pradhan Mantri Fasal Bima Yojana (PMFBY)-Govt sponsored crop insurance

Pradhan Mantri Fasal Bima Yojana (PMFBY) is a government-sponsored crop insurance scheme that integrates multiple stakeholders on a single platform. The scheme was launched in India by the Ministry of Agriculture & Farmers Welfare, New Delhi from the Kharif 2016 season onwards.

The scheme aims at supporting sustainable production in the agriculture sector by way of ensuring the flow of credit to the agriculture sector which will contribute to food security, and crop diversification and enhance the growth and competitiveness of the agriculture sector besides protecting farmers from production risks.

Under the scheme, all farmers who have been sanctioned Seasonal Agricultural Operations (SAO) loans (Crop Loans) from Financial Institutions (FIs), for the notified crop(s) season would be covered compulsorily. The farmers who have not availed of crop loans that have insurable interest in the insured crop(s) may also apply for PMFSY insurance cover but it is optional (not compulsory) for them. The seasonality discipline shall be the same for borrower and non-borrower farmers.

The Scheme can cover all Food crops (Cereals, Millets, and Pulses), Oilseeds crops, and Annual Commercial/Horticultural Crops for which past yield data is available and for which a requisite number of Crop Cutting Experiments (CCEs) will be conducted a part of the General Crop Estimation Survey (GCES).

The Maximum Premium payable by the farmers will be 2% for all Kharif Food & Oilseeds crops, 1.5% for Rabi Food & Oilseeds crops, and 5% for Annual Commercial/Horticultural Crops. The difference between premium and the rate of Insurance charges payable by farmers shall be shared equally by the Centre and State.

The insurance coverage will strictly be equivalent to the sum insured/hectare, as defined in the Govt. notification or /and on the National Crop Insurance Portal multiplied by the sown area for the notified crop. The Loss assessment for crop losses due to non-preventable natural risks will be on an Area approach. In case the majority of insured crops of a notified area are prevented from sowing/planting the insured crops due to adverse weather conditions they will be eligible for indemnity claims up to a maximum of 25% of the sum insured. However, losses due to localised perils (Hailstorm, landslide & inundation) and Post-Harvest losses due to specified perils, (Cyclone/Cyclonic rain & Unseasonal rains) shall be assessed at the affected insured field of the individual insured farmer.

Three levels of Indemnity, viz., 70%, 80%, and 90% corresponding to crop Risk in the areas shall be available for all crops.  The Threshold Yield (TY) shall be the benchmark yield level at which Insurance protection shall be given to all the insured farmers in an Insurance Unit Threshold of the notified crop will be the moving average of yield of the last seven years excluding yield up to two notified calamity years multiplied by Indemnity level.

There will be a provision of on account claims in case of adverse seasonal conditions during crop season viz. floods, prolonged dry spells, severe drought, and unseasonal rains. On account payment up to 25% of likely claims will be provided if the expected yield during the season is likely to be less than 50% of normal yield. The claim amount will be credited electronically to the individual Insured Bank account. The structure of farmer’s premium under the Weather Based Crop Insurance Scheme (WBCIS) will be at par with the PMFBY

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