Updated on: 26 May 2023
Pradhan Mantri Fasal Bima Yojana is a government scheme introduced by the Ministry of Agriculture & Farmers Welfare, New Delhi, in the Kharif 2016 season. This new crop insurance scheme is introduced with the theme of one nation, one plan. The Pradhan Mantri Fasal Bima Yojana has replaced the existing two schemes National Agricultural Insurance Scheme and the Modified NAIS.
Key takeaways
- PMFBY aims to provide financial support and risk mitigation to farmers in the event of crop loss or damage due to natural calamities, pests, or diseases.
- Under the policy, farmers can protect their crops and livelihoods by purchasing insurance policies.
- These programs aim to address the diverse needs of their citizens, uplift marginalized communities, and provide essential services.
- With 5 types of schemes under the policy, this crop insurance program caters to the diverse needs of Indian farmers.
- The policy covered cultivators, loanee and non-loanee farmers, and those who are involved in seasonal cultivation operations.
PMFBY is an initiative to safeguard the interests of farmers by providing them with affordable crop insurance and ensuring their financial stability during unforeseen agricultural contingencies. Let us find out more about this scheme here.
What is PMFBY?
Pradhan Mantri Fasal Bima Yojana (PMFBY) is a flagship agricultural insurance scheme launched by the Government of India. Introduced in 2016, PMFBY aims to provide financial support and risk mitigation to farmers in the event of crop loss or damage due to natural calamities, pests, or diseases.
Types of PMFBY?
Under PMFBY, farmers can protect their crops and livelihoods by purchasing insurance policies. To cater to the diverse needs of farmers, the scheme offers various types of coverage options.
Comprehensive Risk Insurance Scheme (CRIS)
The Comprehensive Risk Insurance Scheme is the standard and most widely adopted type of coverage under PMFBY. It provides coverage for all stages of the crop cycle, starting from sowing to post-harvest losses caused by a range of risks such as drought, flood, cyclone, pests, diseases, etc. The premium rates for this type of coverage are heavily subsidized, ensuring affordability for farmers.
Weather-Based Crop Insurance Scheme (WBCIS)
The Weather-Based Crop Insurance Scheme focuses on specific weather events that can negatively impact crop yields. It utilizes historical weather data to determine the likelihood of adverse weather conditions during the crop season. If the actual weather conditions deviate significantly from the historical data and it leads to crop losses, farmers receive compensation. WBCIS is particularly suitable for crops sensitive to weather fluctuations, such as rainfall, temperature, or humidity.
Modified National Agricultural Insurance Scheme (MNAIS)
The Modified National Agricultural Insurance Scheme is designed to cover localized risks that affect specific regions or crops. It aims to provide tailored coverage for crops that are prone to localized perils like hailstorms, landslides, fire, etc. MNAIS takes into account the area-specific risks and provides compensation accordingly, ensuring that farmers receive adequate support when such localized calamities occur.
Pilot Weather Insurance Scheme (PWIS)
The Pilot Weather Insurance Scheme is a pilot project aimed at testing and implementing innovative approaches to crop insurance. It incorporates cutting-edge technologies, remote sensing, and advanced data analytics to assess and predict weather patterns and their impact on crops. By leveraging real-time weather data, PWIS offers timely compensation to farmers in case of weather-related crop losses, helping them cope with uncertainties.
Restructured Weather-Based Crop Insurance Scheme (RWBCIS)
The Restructured Weather-Based Crop Insurance Scheme is an improved version of the original WBCIS. It provides a greater degree of flexibility and precision in assessing weather-related risks and compensating farmers accordingly. RWBCIS incorporates advancements in technology and better calibration of weather parameters to enhance the accuracy of coverage and reduce the basis risk for farmers.
Objectives of PMFBY
Agriculture plays a crucial role in the economy of many countries, providing food security and employment and contributing significantly to the Gross Domestic Product (GDP). However, farmers face numerous risks, including unpredictable weather patterns, pest attacks, and market fluctuations, which can lead to crop failures and financial distress. Recognizing the need to safeguard farmers’ interests, the Government of India introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2016.
Objective 1: Ensuring Financial Security for Farmers
The primary objective of PMFBY is to provide a safety net to farmers by mitigating the financial risks associated with crop failures. Under this scheme, farmers pay a nominal premium, and in the event of a crop loss due to natural calamities, pests, or diseases, they receive compensation for the damage.
By providing timely and adequate insurance coverage, PMFBY aims to prevent farmers from falling into debt traps and enable them to recover from losses efficiently. This financial security enhances the confidence of farmers, encouraging them to adopt modern agricultural practices and invest in better inputs.
Objective 2: Encouraging Risk Management in Agriculture
By promoting crop insurance, PMFBY aims to create a culture of risk management among farmers. In the absence of insurance, farmers often resort to traditional and less productive practices due to the fear of crop failure and associated financial burden. However, with the availability of crop insurance, farmers are more likely to adopt advanced techniques, use quality seeds and fertilizers, and implement efficient irrigation practices.
PMFBY’s objective is to empower farmers to make informed decisions and embrace innovative technologies that increase agricultural productivity, thereby ensuring food security for the nation.
Objective 3: Increasing Crop Coverage and Farmer Participation
Another crucial goal of PMFBY is to enhance the coverage of insured crops and encourage maximum farmer participation. The scheme aims to bring all farmers, including small and marginal ones, under the insurance umbrella.
To achieve this objective, the government has simplified the enrolment process, introduced online portals, and collaborated with various financial institutions and agricultural agencies to reach out to farmers effectively.
PMFBY emphasizes raising awareness about the benefits of crop insurance, educating farmers about the claim settlement procedures, and addressing their concerns promptly. This objective seeks to ensure that a vast majority of farmers are protected against crop losses and can access the benefits of the scheme.
Objective 4: Promoting Sustainable Agriculture
PMFBY recognizes the importance of sustainable agriculture for long-term food security and environmental conservation. The scheme encourages farmers to adopt practices that conserve natural resources, prevent soil erosion, and promote water-use efficiency. By linking insurance premiums to good agricultural practices, PMFBY incentivizes farmers to adopt sustainable farming techniques. This objective aligns with the government’s commitment to promoting sustainable development and addressing climate change concerns in the agricultural sector.
Who are Covered Under PMFBY?
The scheme primarily targets farmers, both small and large, who depend on agriculture for their livelihood. It covers all farmers who have taken loans for agricultural purposes from financial institutions recognized by the government. Additionally, the scheme is also open to non-loanee farmers, sharecroppers, and tenant farmers who cultivate the land of others. Let us see who all are covered under this scheme.
Cultivators
The primary beneficiaries of the PMFBY are cultivators or farmers who undertake the cultivation of notified crops. This includes both small and marginal farmers who own land as well as tenant farmers who cultivate on someone else’s land.
Loanee and Non-loanee Farmers
The scheme covers both loanee and non-loanee farmers. Loanee farmers are those who have taken agricultural loans from financial institutions, including commercial banks, cooperative banks, and regional rural banks. Non-loanee farmers, on the other hand, are those who do not have any outstanding agricultural loans.
Coverage for Sharecroppers
Sharecroppers play a vital role in agricultural activities, particularly in regions where land fragmentation and limited resources are prevalent. Sharecropping is a practice where a landowner allows a farmer, known as a sharecropper, to cultivate their land in exchange for a share of the produce. These sharecroppers often face numerous challenges due to their limited access to resources and land tenure insecurity.
Under the PMFBY, sharecroppers are eligible for coverage. They can avail themselves of the benefits of the scheme by obtaining an agreement signed by both the landowner and the sharecropper. The agreement serves as proof of sharecropping and ensures that the sharecropper can claim insurance benefits in case of crop loss or damage.
Coverage for Tenant Farmers
Tenant farming is another prevalent form of agricultural practice wherein a person cultivates land belonging to someone else, known as the landowner, by paying rent. Tenant farmers typically face similar challenges as sharecroppers, including limited access to credit, lack of land tenure security, and vulnerability to crop losses.
Recognizing the importance of tenant farmers, the PMFBY extends its coverage to this segment of the farming community as well. Similar to sharecroppers, tenant farmers need to provide the necessary documentation, such as a valid tenancy agreement, to establish their eligibility for insurance benefits under the scheme.
How to enroll the farmers in the Scheme?
With the aim to ensure food security and stabilize the income of farmers, enrolling in the PMFBY scheme can be immensely beneficial. This section will guide you through the step-by-step process of enrolling farmers in the PMFBY scheme, empowering them with a safety net for their agricultural endeavors.
Step 1: Awareness Campaigns and Outreach
The first step in enrolling farmers in the PMFBY scheme is to create awareness about its benefits and eligibility criteria. Government agencies, agricultural extension officers, and local representatives should conduct extensive awareness campaigns in rural areas, organizing workshops, seminars, and village-level meetings to educate farmers about the scheme. These campaigns should focus on explaining the objectives, coverage, premium rates, and claim settlement process of the PMFBY scheme.
Step 2: Identification of Eligible Farmers
Once the awareness campaigns have been conducted, the next crucial step is to identify eligible farmers who can participate in the PMFBY scheme. The identification process should involve gathering essential information such as the farmer’s name, contact details, land ownership documents, and the crops they cultivate. This data can be collected through the collaboration of local administration, agricultural departments, and cooperative societies.
Farmers that are eligible must have an insurable stake in the recognized crop. Non-loanee farmers are required to present the state’s land records, such as the Record of Rights (ROR), land possession certificate (LPC), and so on.
Step 3: Registration and Application
To enrol in the PMFBY scheme, farmers need to complete the registration and application process. The following steps should be followed:
a) Farmers must approach their nearest Common Service Centers (CSCs), agricultural offices, or designated insurance company offices to obtain the PMFBY application form.
b) They need to fill out the application form accurately, providing details such as their personal information, landholding details, and crop details.
c) Farmers should attach the necessary supporting documents, including land ownership documents, bank account details, and identity proof.
d) The completed application form and supporting documents should be submitted to the nearest CSC, agricultural office, or insurance company office.
Step 4: Premium Calculation and Payment
Once the application is submitted, the insurance company or designated authorities will calculate the premium amount based on the crop, the sum insured, and the farmer’s declared area of cultivation. The premium rates are subsidized, making it affordable for farmers. After the premium amount is determined, farmers can pay their share of the premium through various modes, including online payment, bank transfer, or cash deposit at the designated centres.
Step 5: Issuance of Insurance Policy
Upon successful payment of the premium, farmers will receive an insurance policy document. This policy will serve as proof of their enrollment in the PMFBY scheme. The policy will contain details such as the insured crop, sum insured, premium amount, coverage period, and terms and conditions.
Step 6: Crop Monitoring and Claims Process
Throughout the coverage period, farmers must diligently monitor their crops and report any loss or damage to the nearest agricultural office or insurance company. Prompt reporting is crucial to ensure a timely assessment of crop loss. Trained officials will assess the damage and initiate the claim process accordingly. Farmers will need to provide the necessary documentation, such as photographs, field reports, and other supporting evidence, to support their claims.
Coverage of Risks and Exclusions under the PMFBY Scheme
The PMFBY scheme aims to provide comprehensive insurance coverage to farmers for both yield and prevented sowing risks. It covers a wide range of perils such as drought, flood, cyclone, pest attacks, diseases, and other localized risks. The scheme operates on an “area approach” basis, which means that coverage is provided to all farmers in a notified area for the specific crop(s) and season(s) based on the assessment of risks.
The insurance coverage under PMFBY includes three components:
Yield-Based Coverage
This component covers losses incurred by farmers due to yield reduction caused by various perils mentioned in the scheme. It compensates farmers for the shortfall in the actual yield compared to the guaranteed yield.
Prevented Sowing Coverage
In cases where farmers are unable to sow their crops due to adverse weather conditions or other unavoidable circumstances, they are eligible for compensation under this component. It ensures that farmers are protected against losses incurred before the crop is even sown.
Post-Harvest Losses
PMFBY also provides coverage for post-harvest losses caused by cyclones, unseasonal rains, and other eligible perils. This coverage helps farmers recover their losses incurred during the transportation, storage, or processing of their harvested crops.
Exclusions Under PMFBY
While the PMFBY scheme offers comprehensive coverage, certain exclusions need to be considered. The scheme does not cover losses or damages arising from the following circumstances:
Willful Negligence or Improper Farm Management Practices
If a farmer fails to adhere to recommended agricultural practices or intentionally causes damage to the insured crop, the losses will not be covered.
War and Nuclear Risks
Damage caused by war, war-like situations, or nuclear-related incidents is not covered under the scheme.
Losses Due to Normal Market Risks
Fluctuations in market prices or market-related risks, such as changes in demand or supply, are not covered under PMFBY.
Losses Due to Production Risks Other than Specified Perils
If the crop loss is caused by factors not mentioned in the scheme, such as fire accidents, theft, or malicious activities, it may not be covered.
Losses Due to Insufficient or Improper Storage Facilities
If post-harvest losses occur due to inadequate storage facilities or improper handling, the losses may not be covered.
Responsibilities of the Farmers Under PMFBY
In India, the Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched to mitigate the risks and ensure the well-being of farmers. While the scheme provides crucial financial support, it also entails certain responsibilities that farmers must shoulder.
Timely Enrollment
One of the primary responsibilities of farmers under PMFBY is to enrol themselves in the scheme. Farmers need to register their names and their cultivated land area during the notified enrollment period. It is crucial for farmers to complete this process within the stipulated timeframe to ensure their eligibility for insurance coverage.
Paying Premiums
PMFBY operates on a premium-sharing basis, where farmers are required to contribute a nominal amount towards the premium. The premium rates are highly subsidized by the government, making the insurance affordable for farmers. It is the responsibility of farmers to pay their share of the premium promptly to avail themselves of the benefits of the scheme.
Accurate Reporting
Farmers must provide accurate information regarding their crops, cultivation practices, and land area during the enrollment process. This ensures that the insurance coverage is based on reliable data, enabling fair compensation in the event of crop loss. Any misinformation or misrepresentation may lead to claim rejections, which can be detrimental to the farmers’ interests.
Adhering to Good Agricultural Practices
Implementing good agricultural practices is essential for minimizing crop risks. Farmers should follow recommended guidelines for crop sowing, irrigation, pest control, and harvesting. Adherence to these practices not only reduces the chances of crop failure but also makes farmers eligible for additional benefits such as post-harvest losses and localized calamities coverage.
Timely Reporting of Crop Losses
In case of any crop loss or damage, it is the responsibility of farmers to report the losses to the concerned authorities promptly. This reporting should be done within the specified timeline mentioned in the scheme guidelines. Early reporting enables speedy assessment and settlement of claims, ensuring that farmers receive the financial support they need in a timely manner.
Final Thoughts
While a farmer must enroll for PMFBY to stay financially secure and safe under the uncertain environment, they should also understand the nitty-gritty of the scheme well before making the investment. Farmers should be aware that the Government of India will release operational guidelines and modalities to implement the scheme’s provisions, which may be appended from time to time.
These guidelines and modalities will include specific steps and processes, applicable terms and conditions, roles and responsibilities of the various agencies involved in the scheme’s execution, and roles and responsibilities of other relevant stakeholders. Additionally, the concerned States and Union Territories will thoroughly watch the agricultural situation during each crop season.
