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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.

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 implementation, 38 crore applicant farmers were enrolled and over 12.24 crore (Provisional) applicant farmers have received claims of over Rs. 1,28,522 crore till December 2022.

Upto December 2022 nearly Rs. 25,192 crore were paid by farmers as their share of premium against which claims of over Rs. 1,28,522 crore (Provisional) were paid to them, thus for every 100 rupees of premium paid by farmers, they received Rs. 510 as claims.