Overview
PMFBY is a government crop insurance scheme that farmers can choose to join. It protects farmers financially if their crops are damaged or lost due to events like natural disasters. This helps farmers maintain a stable income and encourages them to use better farming methods.
Introduction
Agriculture is an important part of the Indian economy, but farmers often face serious financial difficulties when their crops are damaged by droughts, floods, excessive rainfall, pests, and other natural risks. Such losses can affect not only their income but also their ability to repay agricultural loans and continue farming. To provide financial protection against these risks, the Government of India introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2016. The scheme aims to make crop insurance more affordable and accessible to farmers while reducing the financial impact of crop failure.
PMFBY provides insurance coverage to farmers for crop losses during different stages of cultivation, from sowing to harvesting and, in certain situations, the post-harvest period. Over time, the scheme has also adopted various digital technologies, satellite-based systems, weather data, mobile applications, and other modern tools to make crop-loss assessment and claim settlement more accurate and transparent. Through these measures, PMFBY seeks to provide timely financial assistance to farmers and strengthen the overall resilience of Indian agriculture.
Quick Facts
The PMFBY provides crop insurance to protect farmers from losses starting before sowing and continuing until after harvesting. It is a Central Sector Scheme, and both the States and farmers can choose whether to participate. The scheme is available to all farmers, including sharecroppers and tenant farmers, as long as they grow the crops covered under the scheme in the areas where the scheme is notified. It covers food crops such as cereals, millets and pulses, oilseeds, and annual commercial and horticultural crops.
Objectives
The main objective of PMFBY is to provide financial support to farmers when their crops are damaged or destroyed due to various risks. This reduces the financial burden on farmers and helps them maintain a stable income, even during difficult agricultural seasons. The scheme also helps ensure that farmers continue to have access to agricultural credit and loans, allowing them to carry on with their farming activities without major financial difficulties.
Another important objective is to encourage farmers to adopt modern and innovative agricultural practices. By providing protection against crop losses, PMFBY gives farmers greater confidence to try improved farming techniques and diversify the crops they grow. This can help increase productivity and reduce dependence on a single crop.
The scheme aims to improve the financial stability and creditworthiness of farmers while supporting the long-term growth of the agricultural sector. It also contributes to making Indian agriculture more productive, diverse, competitive, and resilient against crop-related risks.
Background
The Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched in 2016 to replace the earlier National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS). The main purpose of introducing PMFBY was to provide farmers with better and more affordable protection against crop losses caused by natural and unavoidable risks. Along with PMFBY, the Restructured Weather-Based Crop Insurance Scheme (RWBCIS) continues to provide insurance based on weather conditions. Under RWBCIS, factors such as rainfall, temperature, and other weather conditions are used as an indicator to estimate possible crop losses and provide compensation to farmers.
Salient Features
PMFBY provides comprehensive crop insurance coverage, from the sowing stage to the post-harvest period. It follows an Area Approach, where the village or Gram Panchayat is generally treated as the basic Insurance Unit for major crops. The scheme covers important Kharif and Rabi crops, including cereals, millets, pulses, and oilseeds. Farmers pay only a small part of the premium—2% for Kharif crops, 1.5% for Rabi crops, and 5% for commercial and horticultural crops—while the government provides the remaining subsidy.
The scheme protects farmers against crop losses caused by risks such as drought, dry spells, floods, inundation, and other unavoidable natural events. States may also provide additional coverage for risks such as prevented sowing, planting, or germination. Certain losses, such as those caused by war, nuclear risks, deliberate damage, or other preventable causes, are excluded. Recent provisions also include coverage for wild animal attacks and paddy inundation, subject to the applicable conditions and reporting requirements.
Other important features include Aadhaar-based identification, the option for States to establish their own insurance companies, and the empanelment of insurance companies for a three-year period. This longer period is intended to provide stability and encourage insurance companies to improve their infrastructure and services. For wild animal damage, States can identify vulnerable districts and specify the relevant wild animal species based on historical data and local conditions.
Technology and Digital Initiatives under PMFBY
PMFBY uses several digital and technology-based systems to make crop insurance faster, more accurate, and transparent. DigiClaim helps process insurance claims through the National Crop Insurance Portal (NCIP), with the claim amount being transferred directly to the farmer’s bank account. Farmers can also receive SMS updates about the status of their claims.
The WINDS (Weather Information Network Data Systems) portal collects and provides detailed, local-level weather information. This helps in assessing weather-related risks and estimating crop losses more accurately. Similarly, the YES-TECH (Yield Estimation System Based on Technology) Manual uses technology to improve crop-yield estimation, particularly at the Gram Panchayat level, making the assessment process more precise.
Other initiatives also support better agricultural planning and crop monitoring. The FASAL Project uses satellite information, weather data, and land-based observations to forecast agricultural production. NeGPA (National e-Governance Plan in Agriculture) uses information and communication technology to provide useful agricultural information and is now linked with the Digital Agriculture Mission. ISRO’s Bhuvan platform provides information related to crops, plantations, pests, and weather, while NADAMS helps in monitoring and assessing drought conditions across agricultural areas.
The CROPIC (Collection of Real-Time Observations and Photos of Crops) system uses photographs and real-time information from fields to help verify crop conditions and improve the assessment of crop losses. In addition, AIDE/Sahayak apps support door-to-door enrolment, making it easier for farmers to register for crop insurance and ensuring that more farmers, including those in remote areas, can access the benefits of PMFBY.
Conclusion
The Pradhan Mantri Fasal Bima Yojana (PMFBY) plays an important role in protecting farmers from the financial impact of crop losses caused by natural and other unavoidable risks. By providing affordable crop insurance and financial assistance, the scheme helps farmers maintain a more stable income and continue their agricultural activities even after facing crop damage. It also supports access to agricultural credit and encourages farmers to adopt improved farming practices and diversify their crops.
The increasing use of technology and digital systems has further strengthened the implementation of PMFBY. Tools such as DigiClaim, WINDS, YES-TECH, satellite-based monitoring, CROPIC, and door-to-door digital enrolment help make crop insurance more transparent, accurate, accessible, and efficient. Overall, PMFBY is an important step towards creating a more secure and resilient agricultural sector in India, while reducing the financial risks faced by farmers and supporting their long-term economic well-being.
