Pradhan Mantri Fasal Bima Yojana (PMFBY) - Crop insurance scheme

Introduction 

Agriculture holds a significant place in India's economy, contributing approximately 18% to the Gross Value Added (GVA) as per the Economic Survey 2021-22. Crops are not just a source of livelihood for farmers but also crucial assets for the nation's economy. To safeguard these assets, farmers can opt for insurance under the Pradhan Mantri Fasal Bima Yojana (PMFBY), which provides coverage against various risks associated with farming. This article outlines key aspects of this government initiative.

What is PMFBY ( Pradhan Mantri Fasal Bima Yojana)?

The Pradhan Mantri Fasal Bima Yojana (PMFBY) stands as India's primary agricultural insurance scheme, aligning with the One Nation-One Scheme initiative.

Under PMFBY, annual commercial and horticultural crops, oilseeds, as well as major food crops such as cereals, millets, and pulses, receive coverage.

Participation in PMFBY is voluntary for farmers without institutional credit, while it is mandatory for those availing institutional loans from banks, though voluntary enrollment has been introduced since the Kharif season of 2020.

The scheme is overseen by the Ministry of Agriculture. For detailed information on PMFBY, individuals can visit the official website dedicated to the initiative.

Objectives of PMFBY

The Pradhan Mantri Fasal Bima Yojana (PMFBY) is designed with the following key objectives:

1. Financial Security for Farmers: PMFBY aims to provide financial support to farmers in the event of crop loss due to natural calamities, pests, and diseases. This helps in stabilizing farmers' incomes and reducing their vulnerability to agricultural risks.

2. Comprehensive Coverage: The scheme aims to ensure comprehensive coverage of all food crops, oilseeds, and horticultural crops grown in notified areas against yield losses.

3. Affordable Premiums: PMFBY offers highly subsidized premium rates, making crop insurance affordable for farmers across the country.

4. Encouraging Risk Management: By promoting the use of crop insurance among farmers, PMFBY encourages them to adopt modern agricultural practices and technologies, thereby enhancing productivity and mitigating risks.

5. Supporting Agricultural Growth: PMFBY contributes to the overall growth of the agricultural sector by providing timely compensation to farmers, enabling them to recover from crop losses and invest confidently in the next agricultural cycle.

6. Promoting One Nation-One Scheme: In line with the government's 'One Nation-One Scheme' theme, PMFBY aims to streamline and standardize agricultural insurance practices across the country, ensuring equitable access to insurance benefits for all farmers.

7. Enhancing Farmer Confidence: By assuring financial protection against crop losses, PMFBY enhances farmer confidence and resilience, encouraging sustainable agricultural practices and rural development.

8. Transparency and Accountability: PMFBY promotes transparency and accountability in the administration of crop insurance, ensuring fair and efficient settlement of claims to benefit farmers effectively.

By pursuing these objectives, PMFBY strives to strengthen the agricultural sector, safeguard farmers' interests, and contribute to India's food security goals.

Eligibility for PMFBY (Pradhan Mantri Fasal Bima Yojana)

To be eligible for the benefits of the Pradhan Mantri Fasal Bima Yojana (PMFBY), farmers must fulfill the following criteria:

1. Coverage of Crops: PMFBY covers notified crops (annual commercial and horticultural crops, oilseeds, and food crops such as cereals, millets, and pulses) grown in the notified areas.

2. Farmer Category:

The scheme is optional for farmers who have not availed institutional credit.

Farmers who have borrowed institutional loans from banks are covered under the scheme mandatorily, although voluntary enrollment options have been introduced since the Kharif season of 2020.

3. Notification: The crops to be covered and the areas under the scheme are notified by the respective State Governments and Union Territories.

4. Registration: Interested farmers must register themselves and their crops with the insurance company or its agent during the notified crop season.

5. Premium Payment: Farmers are required to pay a very nominal premium amount, which is subsidized heavily by the central and state governments to make it affordable.

6. Policy Period: The insurance coverage period is aligned with the crop season, and farmers must ensure timely enrollment and payment to avail of the benefits.

7. Administrative Oversight: PMFBY is administered by the Ministry of Agriculture and Farmers Welfare, Government of India, ensuring proper implementation and oversight.

For detailed eligibility criteria and enrollment procedures, farmers can contact their nearest agricultural department offices or visit the official website dedicated to PMFBY.

Coverage and Premiums under Pradhan Mantri Fasal Bima Yojana (PMFBY)

The Pradhan Mantri Fasal Bima Yojana (PMFBY) provides comprehensive coverage against crop loss due to various natural calamities, pests, and diseases. Here's an overview of the coverage and premiums under PMFBY:

Coverage:

1. Crop Coverage: PMFBY covers all notified crops (annual commercial and horticultural crops, oilseeds, and food crops like cereals, millets, and pulses) grown in the notified areas.

2. Perils Covered: The scheme provides coverage against the following perils:

3. Natural Calamities: Includes drought, flood, hailstorm, cyclone, landslide, and other natural disasters.

4. Pests and Diseases: Coverage is extended to losses caused by pests and diseases affecting the insured crops.

5. Sum Insured: The insured amount is based on the scale of finance, which is the cost of cultivation per hectare determined by the government.

6. Premium Rates: The premium rates under PMFBY are highly subsidized to make them affordable for farmers. The premium amount is shared between the central government, state government, and farmers as per the following norms:

7. Premium Sharing: The premium rates are fixed at 2% of the sum insured for Kharif crops, 1.5% for Rabi crops, and 5% for annual commercial and horticultural crops. The remaining premium is shared equally between the central and state governments.

Compensation: In case of crop loss or damage, farmers receive compensation for the shortfall in yield compared to the threshold yield, which is calculated based on historical yield data.

Premium Payment:

1. Affordability: The premium rates are subsidized heavily by the central and state governments to ensure affordability for farmers.
   

2. Payment Schedule: Farmers are required to pay the premium amount at the time of enrollment, which is typically before the sowing period of the crop.
   

3. Voluntary Enrollment: Since the Kharif season of 2020, farmers have the option of voluntary enrollment in PMFBY, especially those who have not availed institutional credit.

Advantages of Pradhan Mantri Fasal Bima Yojana (PMFBY)

Here are the advantages of Pradhan Mantri Fasal Bima Yojana (PMFBY).

1. Wide coverage

PMFBY covers a wide range of crops, including food grains, oilseeds, horticultural crops, annual commercial/non-commercial crops, and plants and plantation crops. This means that a large number of farmers across the country can benefit from the scheme.

2. Affordable premiums

PMFBY provides affordable premiums for farmers, with the premium rate for most crops being just 2% for kharif crops and 1.5% for rabi crops. This helps to ensure that the insurance is accessible to a large number of farmers, even those with limited financial resources.

3. Quick claim settlement

The scheme aims to settle claims within 30 days from the date of intimation of loss. This helps to ensure that farmers can get the financial support they need on time, enabling them to recover from crop loss and resume farming activities.

4. Use of technology

PMFBY uses technology to improve the efficiency and transparency of the insurance process. For example, the scheme uses satellite imagery to assess crop damage and calculate claims, which helps to reduce the time and effort required to process claims.

5. Risk management

PMFBY helps farmers to manage the risks associated with farming, such as crop failure due to natural disasters or pests. By providing financial support in the event of crop loss, the scheme helps farmers to maintain their livelihoods and ensure the sustainability of their farming operations.

BENEFITS OF PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY)

Reduced Premium Contributions:

PMFBY significantly reduces the financial burden on farmers by offering lower premium rates. Farmers contribute only 2% for Kharif crops, 1.5% for Rabi crops, and 5% for Annual and Commercial crops, making insurance more affordable.

Individualized Loss Assessment:

The scheme allows individualized assessment of losses, especially for localized perils like hailstorms, inundation, and landslides. This ensures fair compensation based on specific losses incurred by each farmer.

Plot-Based Yield Loss Assessment:

PMFBY enables yield loss assessment on a per-plot basis in cases of cyclones, cyclonic rains, and unseasonal rains across India. It covers damage to harvested crops left in the field for drying, up to 14 days post-harvest, ensuring accurate compensation.

Prompt On-Account Claim Payments:

Farmers receive on-account claim payments in case of prevented sowing or localized losses. This ensures timely financial support to cope with adverse conditions.

Technology Integration:

PMFBY promotes technology usage by employing smartphones to capture and upload crop data, reducing claim processing delays. Remote sensing technology minimizes the need for physical crop cutting experiments, streamlining the claims process.

Documents Required for Pradhan Mantri Fasal Bima Yojana (PMFBY)

Farmers applying for coverage under the Pradhan Mantri Fasal Bima Yojana (PMFBY) need to submit the following documents:

1. Identification Proof:

Aadhaar Card

Voter ID Card

Passport

Any other government-issued identification proof

2. Land Ownership Proof:

Land records (Khatauni/Khasra)

Copy of the land lease agreement (if applicable)

3. Bank Account Details:

Copy of the bank passbook or statement

4. Crop Details:

Crop sowing certificate

Details of the crops to be insured (type, area, variety, etc.)

5. Premium Payment Proof:

Receipt of premium payment (if applicable)

6. Application Form:

Duly filled application form for PMFBY enrollment

7. Other Supporting Documents:

Any other documents specified by the insurance company or agricultural department for enrollment and verification purposes.

It is advisable for farmers to check with their nearest agricultural department or insurance company for the specific list of documents required and any additional requirements that may apply during the enrollment process for PMFBY. This ensures smooth processing and timely coverage under the crop insurance scheme.

Conclusion 

 The Pradhan Mantri Fasal Bima Yojana (PMFBY) stands as a crucial initiative in India's agricultural landscape, aiming to safeguard farmers' livelihoods and contribute to national food security. Agriculture, pivotal to India's economy, accounts for approximately 18% of the Gross Value Added (GVA). Crops not only sustain farmers but also uphold the country's economic backbone. PMFBY offers coverage for annual commercial and horticultural crops, oilseeds, and major food crops like cereals, millets, and pulses, shielding farmers from losses due to natural calamities, pests, and diseases.

FAQ - 

1. What is the claim amount for PMFBY?

The payout will be 25% of total sum insured and the policy will be terminated after that. This provision would be needed to be notified within 15 days of the cut-off date of enrolment by the State Govt., beyond which if invoked, no claim would be payable.

2. How much amount is covered under PMSBy?

Pradhan Mantri Suraksha Bima Yojana provides an accidental death and disability insurance cover of Rs. 2 lakh to the policyholder's nominee in case of death.  In case the policyholder becomes totally and permanently disabled, he or she will get Rs. 2 lakh as well.30 Jul 2023

3. How do I check my Bima status?

You can visit the Parivahan Sewa website, VAHAN portal, mParivahan app or the IIB portal to check insurance status by vehicle number.