Pradhan Mantri Fasal Bima Yojana (PMFBY) is a crop insurance programme by which the Government of India fosters the nation's farmers in their financial security against crop casualties. Agriculture in our country is subject to weather-related risks and thus inclined towards sporadic droughts and flood conditions accompanied by pests and diseases, resulting in losses for farmers. The provision of insurance with affordable premiums is what PMFBY offers.

The scheme was rolled out on 13 January 2016 by the Ministry of Agriculture and Farmers Welfare, Government of India.

What is Pradhan Mantri Fasal Bima Yojana (PMFBY)?

PMFBY is an insurance initiative for crops that covers farmers from financial losses caused by crop failures. The scheme is based on subsidies and works as follows:

Farmers are supposed to pay only a small portion of the premiums.
The remainder of the premium will be borne by the Central and State Governments.

This scheme covers standing crops and horticultural crops, including:

Food crops (cereals, millets, pulses)
Oilseeds
Cotton
Sugarcane
Horticultural crops

Insurance seeks to protect farmers against yield losses from:

Droughts
Floods
Cyclones
Hailstorms
Pests and diseases

Objectives of PMFBY

1. Risk Mitigation: To reduce the financial risks faced by farmers due to crop damage or failure.

2. Income Stabilisation: To stabilise farmers' income during adverse agricultural seasons.

3. Encourage Modern Farming: To promote adoption of improved seeds, modern techniques, and agricultural technology.

4. Promote Financial Inclusion: To make crop insurance affordable and accessible to all farmers, including tenant farmers and sharecroppers.

5. Promote Sustainable Agriculture: To encourage climate-resilient and sustainable farming practices.

6. Technology Integration: To use satellite imagery, remote sensing, and smart devices for accurate crop assessment.

7. Reduce Indebtedness: To prevent farmers from falling into debt traps due to crop loss.

Agricultural Insurance Crop Eligibility

PMFBY covers farmers such as:

Small and marginal farmers, large farmers
Individual farmers
Groups or clusters of farmers
Tenant farmers and sharecroppers (wherever state guidelines apply)

Duration & Conditions

The principal eligibility aspect includes crop-specific eligibility for that particular state. In some states, only certain state-notified crops are eligible. In such states, the concerned authority shall declare crops that may be insured under the framework.

Farmers must apply during the enrollment period, which in most cases is aligned with the sowing season.

In a year when the farmer is covered under more than one notification during the sum insured period, the farmer will ensure that he/she avails the opportunity to receive compensation through all concerned channels.

Bank account coverage is highly recommended because claim payments are made only through Direct Benefit Transfer (DBT). Farmers should connect with local agricultural departments for details specific to their respective states.

Scope and Rates Appertaining to PMFBY

PMFBY covers principal crops such as cereals, oilseeds, pulses (such as chickpeas), commercial crops like cotton, vegetables, and tuber crops.

The following premium rates are payable by farmers:

Crop TypeRate of Premium (of Sum Insured)

Kharif Crops2%Zaid Crops2%Rabi Crops1.5%Horticultural/Commercial Crops5%

The differential premium amount is subsidized by the government.

In certain areas like:

North-Eastern States
Jammu & Kashmir
Himachal Pradesh

The Government may bear a higher percentage of the premium.

Calculation of the Sum Insured

The sum insured is usually calculated by:

Average yield per hectare
Area under cultivation
Minimum Support Price (MSP)

Claims under PMFBY

The loss adjustment process involves several steps:

1. Notice of Loss: Farmers report crop damage to the insurer within 72 hours of loss.

2. Crop Cutting Experiments (CCE): Actual yield losses are determined in sample plots.

3. Claim Assessment Report (CAR): Data from CCE is used to calculate compensation.

4. Claim Application (Form-II): This form should be filled with necessary attachments by farmers.

5. Verification: The claim and relevant documents are verified by the insurer.

6. Claim Settlement: After verification, the claim is processed.

7. Benefit Payment: The claim amount is credited directly to the farmer's bank account.

Externalities of Pradhan Mantri Fasal Bima Yojana

Provision of financial security through insurance coverage
Indemnity for crop loss due to droughts or floods
Affordable premium rates due to government subsidy
Active risk protection against weather and natural calamities
Encouragement of modern agriculture practices
Reduction in debt burden after crop failure
Ensures stability in agricultural production and strengthens national food security

Conclusion

Pradhan Mantri Fasal Bima Yojana is an important agricultural insurance scheme supporting Indian farmers. By making insurance coverage affordable and ensuring timely compensation, PMFBY provides stability in farm income and encourages improved farming practices.

The scheme not only protects farmers from crop-related risks but also contributes to national food security and rural economic development.

Frequently Asked Questions (FAQs)

Who can apply for PMFBY?

Farmers of all categories — small, marginal, large, tenant, and sharecroppers — are eligible, subject to state-specific guidelines.

Which crops does PMFBY insure?

All food crops, oilseeds, commercial crops, and horticultural crops notified by respective state governments.

What is the premium rate under PMFBY?

Farmers pay 2% for Kharif crops, 1.5% for Rabi crops, and 5% for commercial and horticultural crops.

How is compensation calculated?

Compensation is calculated based on crop yield data obtained through Crop Cutting Experiments (CCE).

How is crop loss reported?

Farmers must inform the insurer or concerned authority within 72 hours of crop damage.

How are claims settled?

Compensation is transferred directly to the farmer’s bank account through DBT.

Is PMFBY available across India?

Yes, PMFBY is a pan-India scheme implemented after state-level crop notifications.

/content/mofsl-website-adobe/fragments/pf-disclaimer