#Explained : PM Fasal Bima Yojna (PMFBY)

Pradhanmantri Fasal Bima Yojna was announced on 18th February 2016 by prime minister Narendra Modi. It is administered by the Ministry of Agriculture and Farmers' Welfare. 

PMFBY aims to provide financial support to farmers suffering crop loss or damage. Agriculture contributes to about 20% in Indian GDP, and 70% people from rural India are primarily dependent on farming for their livelihood. The government claims, 85% of the registered farmers under the scheme are either small or marginal farmers.

PMFBY is an initiative by the government to reduce the risk, and possibility of loss for the farmers.

PMFBY is an advancement scheme of  NAIS / MNAIS (Modified National Agricultural Insurance Scheme), the two previous insurance scheme of the Government of India.

According to PIB press release, over 36 crore farmer applications have been insured under PMFBY. And over 1,07,059 crores of claims have been paid under the scheme as of 4th February, 2022.

Read more here: Pradhan Mantri Fasal Bima Yojana (PMFBY) enters its 7th year of implementation

Objectives

• To provide insurance coverage or financial support to the farmers in the event of failures of any of the notified crops due to natural calamities, pests and diseases
• To stabilise the income of farmers to ensure their continuance in farming
• To encourage farmers to adopt innovative and modern agriculture practices
• To ensure the flow of credit to the agriculture sector

Who are covered under the scheme

All farmers growing notified crops in a notified area during the season are eligible for the scheme.

Notified Area: Notified Area is the Unit of Insurance decided by the State Govt. for notifying a Crop during a season.

Notified Crops: The Scheme can cover all the Crops for which past yield data is available and grown during the notified season.

As defined by the PMFBY

It has been made completely voluntary for all the farmers, from kharif season 2020.

PMFBY Premium Rates

The Actuarial Premium Rate (APR)/ rate of Insurance Charges by the Implementing agency nand payable by the farmer will be as per the following table:

Farmers pays the lowest premium rates, remaining 'rate of insurance' is shared between government by the Central and State Governments on 50:50 basis except in North-Eastern Region where it is 90:10.

Yields lost due to non-preventable risks, such as natural fire and lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado will be covered under the scheme. In addition, risks due to flood, inundation and landslide, drought, dry spells, pests/diseases are also covered in the insurance scheme.

About the website

Farmers can register through the portal of the government of India. The portal has so many options and is up to date. Farmers can calculate the premium to be paid based on the crop they grow and area of land they have. They can also see the status of their application.

• National Crop Insurance Portal (NCIP) (www.pmfby.gov.in) which has been in use since Kharif 2018.
• Secured credential/login, preferably linked with Aadhaar Number and mobile One-Time Password (OTP) based.
• States facilitate Insurance Companies with Satellite Imagery wherever required and also facilitate usage of Drones.
• Crop Insurance App provides easy enrollment of farmers and makes it easier to report crop loss within 72 hours of occurrence of any event.

Comparison with previous scheme

Problems in the implementation

As agriculture is part of the con-current list i.e. both state and central governments have a say in the implementation of the scheme.

In 2020, several states declined to implement the scheme. The State of Gujarat exited the PMFBY scheme in August 2020, citing drains on the state's finances because of the high premiums charged under the scheme. The State of Punjab had declined to implement the scheme at all. The states of Andhra Pradesh, Telangana and Jharkhand subsequently backed out from implementing the scheme after initially signing up for it.

There is constant inclusion, and backing out of states going on from the scheme.  

Delay in settlement of claims defeats the very purpose of the flagship PMFBY, said the Parliamentary Standing Committee On Agriculture in the report tabled in Lok Sabha. The committee few other issues, like how insurances companies were benefiting from the scheme not the farmers.

Scheme revamp 2023

Taking things into consideration, the Agriculture ministry proposed few changes which will be implemented from next kharif season of 2023.

In the revamped PMFBY, a provision has been incorporated wherein if states don’t release their share before March 31 for the Kharif season and September 30 for Rabi, they would not be allowed to participate in the scheme in subsequent seasons.

Insurance companies have to now spend 0.5% of the total premium collected on information, education and communication (IEC) activities. 

The government has given the flexibility to states/UTs to implement PMFBY and given them the option to select any number of additional risk covers/features like prevented sowing, localised calamity, mid-season adversity, and post-harvest losses.

'Meri Policy Mera Hath'

Recently PMFBY has started a campaign called “Meri Policy Mera Hath” under which farmers are motivated in the country to insure their crops.

Under this program, every farmer who has taken insurance under the Pradhan Mantri Fasal Bima Yojana (PMFBY) will get the policy documents at their doorstep.

Not just this, marginal farmers not becoming part of the scheme. Through initiative as mentioned above, the government is increasing the number of beneficiaries under the policy.

Conclusion

Every scheme for the public has some drawbacks, but constant feedback and discourses help the implementation process. Same is the case with PMFBY. The mentioned changes attempt to bring more farmers, and insurance companies in the scheme. The competition among the insurance companies will help farmers get better claim settlements.

Including relevant changes in the scheme, as requested by various state governments will help in the better implementation of the policy. If more states implement the policy, automatically number of beneficiaries will increase too.

Central government, in tandem with state governments, to enhance in the agriculture sector and the state of farmers. With climate change, the risk in the farming has also increased, the scheme will ensure a safe, if not prosperous, future for the agricultural sector.

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