Overview
PMFBY is a government crop insurance scheme that protects farmers from financial losses when their crops are damaged. It helps farmers maintain a stable income and encourages them to adopt better farming practices.
Key Features
- Purpose: PMFBY provides comprehensive crop insurance to protect farmers from crop losses caused by various risks, covering the crop cycle from before sowing until the post-harvest period.
- Type: It is a Central Sector Scheme, meaning it is implemented with financial support from the Central Government.
- Nature: The scheme is demand-driven and voluntary. Farmers can choose whether to take crop insurance, and States also participate based on their requirements.
- Beneficiaries: All farmers are eligible, including sharecroppers and tenant farmers, provided they grow the notified crops in the notified areas.
- Coverage: The scheme covers major agricultural crops such as cereals, millets, pulses, oilseeds, as well as annual commercial and horticultural crops. This helps farmers reduce the financial impact of crop damage and loss.
Objectives
- Financial protection: PMFBY provides financial support to farmers when their crops are damaged or lost. This helps stabilize their income and ensures that they can continue farming and repay agricultural loans.
- Promote modern farming: The scheme encourages farmers to adopt modern and innovative farming methods and diversify their crops, which can improve productivity and reduce risks.
- Improve farmers’ financial stability: By protecting farmers from major crop losses, PMFBY helps maintain their creditworthiness, making it easier for them to access agricultural credit when needed.
- Strengthen agriculture: Overall, the scheme aims to make the agriculture sector more stable, productive, and competitive while reducing the financial risks faced by farmers.
Salient Features
- Background: PMFBY was launched in 2016 to replace the National Agricultural Insurance Scheme (NAIS) and Modified NAIS. However, the Restructured Weather-Based Crop Insurance Scheme (RWBCIS) continues separately. Under RWBCIS, weather conditions such as rainfall, temperature, and humidity are used as indicators to estimate crop losses.
- Area Approach: PMFBY follows an Area Approach, where a village or Gram Panchayat is generally treated as the Insurance Unit for major crops. Crop losses are assessed at the defined area level rather than only for an individual farmer.
- Crops Covered: For both Kharif and Rabi seasons, the scheme covers cereals, millets, pulses, and oilseeds. Annual commercial and horticultural crops can also be covered as per the notified provisions.
- Premium: Farmers pay a fixed share of the premium, while the remaining premium is supported through government subsidy. The premium is generally calculated as a percentage of the Sum Insured or the Actuarial Premium Rate (APR), whichever is lower.
- APR: It is the premium rate calculated and fixed by the insurance company based on the estimated risk of the crop and area.
- Crops with MSP: For crops having a Minimum Support Price (MSP), the sum insured may be calculated using the scale of finance or the notified average yield value linked to MSP.
- Crops without MSP: For crops that do not have an MSP, the farm-gate price is considered for calculating the value of the insured crop.
Risk Coverage
- Basic Coverage: The scheme mainly protects farmers against yield losses from sowing to harvesting caused by natural risks that cannot be prevented, such as drought, dry spells, floods, inundation and other notified calamities.
- Add-on Coverage: States can choose additional protection for risks such as prevented sowing, prevented planting, or failure of germination, depending on local conditions.
- General Exclusions: PMFBY generally does not cover losses caused by war, nuclear risks, malicious damage, or risks that could have been prevented by the farmer.
- New Add-on Coverage: Additional provisions include protection against wild animal attacks and paddy inundation, subject to the applicable conditions and reporting requirements. Wild-animal damage is to be reported within the prescribed 72-hour period through the designated app/system.
Other Important Provisions
- Aadhaar: Aadhaar-based identification is required for farmers covered under the scheme.
- State Insurance Companies: States have the option to establish or use their own insurance companies for implementing crop insurance.
- Longer Tenure: Insurance companies are generally empanelled for a 3-year period, which helps provide continuity, improve infrastructure, and encourage better implementation.
- State-Level Identification: States identify the wild animals and vulnerable districts/areas that will be covered under the relevant provisions, based on historical data and local conditions.
Other Key Initiatives under PMFBY
- DigiClaim: Claims are processed through the National Crop Insurance Portal (NCIP) and the approved compensation is transferred directly to the farmer’s bank account. Farmers also receive SMS updates about the status of their claims.
- WINDS Portal: The Weather Information Network Data Systems (WINDS) portal collects and provides local-level weather information. This helps improve the assessment of weather-related crop risks and insurance claims.
- YES-TECH: The Yield Estimation System based on Technology (YES-TECH) uses modern technology to estimate crop yields more accurately, especially at the Gram Panchayat level. It helps reduce dependence only on traditional crop-cutting methods.
- FASAL: FASAL (Forecasting Agricultural output using Space, Agro-meteorology and Land-based observations) uses satellite data, weather information and field observations to estimate crop production more accurately.
- NeGPA: The National e-Governance Plan in Agriculture (NeGPA) uses Information and Communication Technology (ICT) to provide farmers and other stakeholders with useful agricultural information. It has now been integrated with the Digital Agriculture Mission.
- ISRO’s Bhuvan: Bhuvan, developed by ISRO, provides satellite-based information that can help monitor crops, plantations, pests, weather and agricultural conditions.
- NADAMS: The National Agricultural Drought Assessment and Monitoring System (NADAMS) uses satellite and other data to monitor drought conditions and assess their impact on agriculture.
- CROPIC: CROPIC (Collection of Real-Time Observations and Photos of Crops) uses real-time photographs and field-level information to improve crop monitoring and make loss assessment more transparent.
- Door-to-Door Enrolment – AIDE/Sahayak: The AIDE/Sahayak app helps officials and field workers reach farmers directly at their homes or farms for crop insurance enrolment, making the process easier and improving awareness and participation.
Conclusion
PMFBY is an important crop insurance scheme that provides financial protection to farmers against crop losses caused by natural risks and other notified events. By covering different stages of the crop cycle and supporting farmers through timely compensation, the scheme helps stabilize farm income and reduce financial uncertainty. The use of technologies such as DigiClaim, WINDS, YES-TECH, CROPIC, FASAL and satellite-based systems has made crop assessment and claim settlement more accurate, transparent and efficient. Overall, PMFBY aims to create a safer and more resilient agricultural sector by protecting farmers from unexpected crop losses and encouraging modern farming practices.
