Pradhan Mantri Fasal Bima Yojana (PMFBY)
🟠 Topic 28: Pradhan Mantri Fasal Bima Yojana (PMFBY)
📌 Introduction
Agriculture in India is highly vulnerable to weather shocks, pest attacks, and market volatility, making crop insurance essential for risk mitigation. In 2016, the Government of India launched Pradhan Mantri Fasal Bima Yojana (PMFBY) — the world’s largest crop insurance scheme — aimed at providing affordable insurance coverage to farmers and ensuring financial stability in the face of crop losses.
🔹 What is PMFBY? 🌾
📖 Definition
PMFBY is a comprehensive crop insurance scheme that provides coverage against crop losses due to natural calamities, pests, diseases, and extreme weather events.
Objective
✔️ To ensure stability of farmers’ incomes.
✔️ To encourage farmers to adopt modern farming practices.
✔️ To promote credit flow to agriculture.
🔹 Key Features of PMFBY
| Feature | Description |
|---|---|
| Affordable Premium | Farmers pay a subsidized premium, while government shares the bulk. |
| Universal Coverage | Covers all food grains, oilseeds, horticultural & commercial crops. |
| Comprehensive Risk Coverage | Covers pre-sowing, post-harvest, and localized calamities. |
| Technology Use | Remote sensing, drones, smart sampling for yield estimation. |
| Direct Benefit Transfer (DBT) | Claim settlements directly into farmers’ bank accounts. |
| Cluster Approach | Insurance companies assigned clusters through competitive bidding. |
🔎 Premium Rates
| Crop Type | Farmer’s Premium Share |
|---|---|
| Kharif Crops | 2% of sum insured |
| Rabi Crops | 1.5% of sum insured |
| Commercial/Horticultural Crops | 5% of sum insured |
- The remaining premium is shared equally by the Centre and State Governments.
🔹 Risks Covered Under PMFBY
| Stage | Risk Covered |
|---|---|
| Pre-Sowing | Prevented sowing due to natural calamities |
| Sowing to Harvest | Losses due to drought, flood, cyclone, pests, diseases |
| Post-Harvest | Losses due to unseasonal rains within 14 days of harvest |
| Localized Risks | Hailstorms, landslides, inundation |
🔹 What is Not Covered?
- Losses due to war, nuclear risks.
- Malicious damage, theft.
- Intentional crop damage.
🔹 Evolution & Key Reforms in PMFBY
Key Changes (2020 Revamp)
| Reform | Description |
|---|---|
| Voluntary Enrollment | Farmers free to opt in/out (earlier mandatory for loaned farmers). |
| State Flexibility | States can select crops and areas to be covered. |
| Technology Use | Remote sensing, drones, and smart sampling made mandatory. |
| Premium Delay Penalty | States delaying premium subsidy beyond stipulated time face penalties. |
Performance Highlights
| Parameter | Value |
|---|---|
| Farmers Covered (2023) | ~5 crore |
| Total Area Covered | ~30% of gross cropped area |
| Total Premium Collected | ~₹30,000 crore annually |
| Claims Paid (2023) | ~₹20,000 crore |
🔹 Institutional Framework
| Institution | Role |
|---|---|
| Ministry of Agriculture | Policy formulation & oversight |
| State Governments | Crop notification & premium sharing |
| Insurance Companies | Risk underwriting & claim settlement |
| Banks | Enrollment of loanee farmers |
| Technical Agencies | Remote sensing, weather data provision |
🔹 Benefits of PMFBY
✔️ Provides financial security to farmers.
✔️ Encourages investment in modern technology.
✔️ Stabilizes farm incomes, reducing distress migration.
✔️ Enhances agricultural credit flow.
✔️ Promotes climate-resilient agriculture.
🔹 Challenges in PMFBY Implementation
1️⃣ Delay in Premium Subsidy
- States often delay payment of their share, leading to delayed claims settlement.
2️⃣ Exclusion of Tenant Farmers
- Land ownership records often required for enrolment.
- Excludes tenant farmers and sharecroppers.
3️⃣ Low Awareness
- Many farmers are unaware of scheme provisions, claim processes.
4️⃣ Area-Based Approach
- Compensation based on average yield loss at block level, not individual farms.
- Farmers with localized losses often receive no compensation.
5️⃣ High Premium in Some Regions
- In disaster-prone areas, premiums are higher, discouraging participation.
🔹 Case Study – PMFBY in Maharashtra
- Maharashtra has highest enrollment under PMFBY.
- Extensive use of weather data and satellite imagery for crop assessment.
- However, delayed state premium payment led to disputes with insurers, affecting claim settlements.
🔹 Technological Interventions in PMFBY
| Technology | Application |
|---|---|
| Remote Sensing | Crop health monitoring |
| Drones | Post-disaster crop assessment |
| Weather Stations | Real-time weather data |
| Geo-tagging | Plot-level identification & transparency |
🔹 Comparison with Previous Schemes
| Scheme | Features | Coverage |
|---|---|---|
| NAIS (1999) | Yield-based, limited crops | 23% cropped area |
| MNAIS (2010) | Unit area reduced, some post-harvest cover | Limited states |
| PMFBY (2016) | Comprehensive, technology-based | 30% cropped area (2023) |
📊 Summary Table – PMFBY Overview
| Parameter | Details |
|---|---|
| Launch Year | 2016 |
| Premium Subsidy | Shared 50:50 (Centre:State) |
| Crops Covered | All food grains, oilseeds, horticulture crops |
| Enrollment Mode | Banks, Common Service Centres, FPOs |
| Claim Process | Remote sensing + ground truthing |
📚 Practice MCQ
1️⃣ Consider the following statements regarding Pradhan Mantri Fasal Bima Yojana (PMFBY):
- It covers both food and commercial crops.
- Farmers pay a subsidized premium.
- Claims are directly transferred to farmers’ bank accounts.
Which of the above statements are correct?
✅ Options:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3
2️⃣ What is the premium rate for Kharif crops under PMFBY?
✅ Options:
(a) 1%
(b) 2%
(c) 4%
(d) 5%
3️⃣ Which institution manages the implementation of PMFBY?
✅ Options:
(a) NITI Aayog
(b) Ministry of Agriculture
(c) NABARD
(d) Ministry of Finance
4️⃣ Which technology is used for crop yield estimation in PMFBY?
✅ Options:
(a) Drones
(b) Blockchain
(c) Artificial Intelligence
(d) All of the above
5️⃣ Under PMFBY, which stage is not covered?
✅ Options:
(a) Pre-sowing losses
(b) Post-harvest losses
(c) Market price fluctuations
(d) Localized calamities
