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Crop Insurance

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Crop Insurance

Agriculture in India is highly susceptible to risks like droughts and floods. It is necessary to protect the farmers from natural calamities and ensure their credit eligibility for the next season. For this purpose, the Government of India has introduced agricultural insurance schemes throughout the country.

Pradhan Mantri Fasal Bima Yojana

Launched on 18 February 2016, The Pradhan Mantri Fasal Bima Yojana (PMFBY) envisages a uniform premium of only 2 per cent to be paid by farmers for Kharif crops, and 1.5 per cent for Rabi crops. The premium for annual commercial and horticultural crops will be 5 per cent.

PMFBY scheme marked its nine-year anniversary on February 18, 2025, celebrating almost a decade of empowering the farmers of India. Witnessing the success and potential of the scheme, the Union Cabinet in January 2025 approved the continuation of PMFBY scheme and Restructured Weather Based Crop Insurance Scheme till 2025-26 with a total budget of Rs. 69,515.71 crore.

Restructured Weather Based Crop Insurance Scheme (RWBCIS) is a weather index-based scheme, which was introduced along with PMFBY. The basic difference between the PMFBY and RWBCIS is in its methodology for calculation of admissible claims to the farmers.

Objective of the Scheme

PMFBY aims at supporting sustainable production in agriculture sector by way of:

  • providing financial support to farmers suffering crop loss/damage arising out of unforeseen events
  • stabilizing the income of farmers to ensure their continuance in farming
  • encouraging farmers to adopt innovative and modern agricultural practices
  • ensuring flow of credit to the agriculture sector; which will contribute to foodsecurity, crop diversification and enhancing growth and competitiveness ofagriculture sector besides protecting farmers from production risks.
Coverage of Farmers

All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage. However, farmers should have insurable interest for the notified/insured crops. The non-loanee farmers are required to submit necessary documentary evidence of land records prevailing in the State (Records of Right (RoR), Land possession Certificate (LPC) etc.) and/ or applicable contract/ agreement details/other documents notified/permitted by concerned State Government(in case of sharecroppers/ tenant farmers).

Coverage of Crops
  1. Food crops (Cereals, Millets andPulses)
  2. Oilseeds
  3. Annual Commercial / Horticulturalcrops

Coverage of Risks and Exclusions

Following stages of the crop and risks leading to crop loss are covered under the scheme.
  • 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 risks, viz. Drought, Dry spells, Flood, Inundation, Pests and Diseases, Landslides, Natural Fire and Lightening, Storm, Hailstorm, Cyclone,Typhoon,Tempest,Hurricane and Tornado
  • 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 and spread condition in the field after harvesting against specific perils of cyclone and 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 and nuclear risks, malicious damage and other preventable risks shall be excluded.

 

PMFBY Implementation Status

Since inception of the scheme till 2023-24 season, 63.19 crore farmer applications over an area of 42.21 crore hectare for a sum insured of Rs. 17,29,395 crore has been insured under the scheme. Total claims of Rs.1,75,276 crore have been paid against the farmers premium of Rs. 32,475 crore during this period. The Gross Cropped Area (GCA) covered in 2023-24 was 604 lakh Ha. as compared to 501 lakh Ha. in 2022-23, with a growth of over 20.5%.

Reference:

  1. https://pmfby.gov.in/
  2. Operational Guidelines – Pradhan Mantri Fasal Bima Yojana, Ministry of Agriculture & Farmers Welfare, GoI
  3. Pradhan Mantri Fasal Bima Yojana turns Nine, Ministry of Agriculture & Farmers Welfare via PIB
  4. Implementation of Pradhan Mantri Fasal Bima Yojana, Ministry of Agriculture & Farmers Welfare via PIB