Overview
The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a government crop insurance scheme that farmers can choose to join. It provides financial protection against crop losses caused by natural risks, helps farmers maintain a stable income, and encourages them to adopt modern and improved farming practices.
Introduction
Agriculture remains a major source of livelihood in India, but farmers often face significant risks due to unpredictable weather conditions, natural disasters, pest attacks, and crop losses. Such uncertainties can affect farmers’ incomes and financial security. To provide protection against these risks, the Government of India launched the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2016. The scheme provides affordable and comprehensive crop insurance, helping farmers recover from crop losses and maintain income stability. By combining financial protection with the use of technology, improved claim settlement mechanisms, and modern agricultural practices, PMFBY plays an important role in strengthening the resilience and sustainability of India’s agricultural sector.
Quick Facts
- Purpose: Provides comprehensive crop insurance protection from the pre-sowing stage to the post-harvest period.
- Type: A Central Sector Scheme.
- Nature: The scheme is demand-driven and voluntary for both States and farmers.
- Beneficiaries: All farmers growing notified crops in notified areas, including sharecroppers and tenant farmers.
- Coverage: Covers food crops such as cereals, millets, and pulses, along with oilseeds and annual commercial and horticultural crops.
Objectives
- Provides financial support to farmers who suffer crop loss or damage, helping them maintain a stable income and ensuring continued access to agricultural credit.
- Encourages farmers to adopt modern and innovative farming practices and promote crop diversification.
- Helps maintain the creditworthiness of farmers and supports the overall growth and competitiveness of the agriculture sector.
Salient Features
- Background: The scheme was launched in 2016 and replaced the earlier National Agricultural Insurance Scheme (NAIS) and Modified NAIS. However, the Restructured Weather-Based Crop Insurance Scheme (RWBCIS) continues separately. RWBCIS uses weather conditions, such as rainfall and temperature, as indicators to estimate crop losses and provide compensation to farmers.
- Area Approach: The scheme follows an Area Approach, where a Village or Gram Panchayat is treated as the Insurance Unit (IU) for major crops.
- Crops Covered: For both Kharif and Rabi seasons, the scheme covers cereals, millets, pulses, and oilseeds.
- Premium Payment: Farmers pay the premium as a percentage of the sum assured or the Actuarial Premium Rate (APR), whichever is lower. The APR is the premium rate determined by insurance companies.
- Sum Insured for Crops:
- For crops with MSP: States and Union Territories can choose either the Scale of Finance or the district-level value of the notional average yield calculated at MSP.
- For crops without MSP: The farm-gate price is considered while determining the sum insured.
Risk Coverage and Exclusions
- Basic Coverage (Mandatory): Covers crop yield losses from sowing to harvesting caused by unavoidable natural risks such as drought, dry spells, floods, inundation, and other non-preventable events.
- Additional Coverage (Optional for States): States can choose to provide extra protection for risks such as prevented sowing, planting, or germination.
- General Exclusions: The scheme does not cover losses caused by war, nuclear risks, deliberate or malicious damage, and other preventable risks.
- New Add-on Coverage (2026): Additional protection has been introduced for crop damage caused by wild animal attacks and paddy inundation. Farmers must report wild animal attacks within 72 hours through the designated app.
- Tenure: Insurance companies are selected for a three-year period to ensure their long-term commitment and encourage better infrastructure and service delivery.
- State-Level Identification: State governments will identify and notify the wild animal species and vulnerable districts based on past data and records of crop damage.
Other Key Initiatives under PMFBY
- DigiClaim: Crop insurance claims are processed through the National Crop Insurance Portal (NCIP) and the payment is transferred directly to farmers. Farmers can also track claim updates through SMS.
- WINDS Portal: The Weather Information Network Data Systems (WINDS) portal provides centralised and local-level weather data to help improve crop risk assessment.
- YES-TECH Manual: The Yield Estimation System based on Technology (YES-TECH) helps in making more accurate crop yield assessments at the Gram Panchayat level.
- FASAL Project: The Forecasting Agricultural Output using Space, Agro-meteorology and Land-based Observations (FASAL) project uses technology and scientific data to estimate agricultural production.
- NeGPA: The National e-Governance Plan in Agriculture (NeGPA) uses Information and Communication Technology (ICT) to provide important agricultural information and services to farmers. It is now integrated with the Digital Agriculture Mission.
- ISRO’s Bhuvan: Provides satellite-based information related to plantations, crop pests, weather, and other agricultural activities.
- NADAMS: The National Agricultural Drought Assessment and Monitoring System helps monitor and assess drought conditions.
- CROPIC: The Collection of Real-Time Observations and Photos of Crops (CROPIC) uses real-time crop observations and photographs for better crop monitoring.
- AIDE/Sahayak App: A door-to-door digital enrolment application that helps farmers register for crop insurance schemes more easily.
Conclusion
The Pradhan Mantri Fasal Bima Yojana (PMFBY) plays an important role in protecting Indian farmers against the financial risks associated with crop losses. Through comprehensive insurance coverage, affordable premiums, and technology-based initiatives such as DigiClaim, YES-TECH, WINDS, and satellite-based monitoring, the scheme aims to make crop insurance more efficient, transparent, and accessible. Its focus on timely compensation, modern agricultural practices, and improved risk assessment helps strengthen farmers’ financial security and resilience. Overall, PMFBY is an important step towards building a more secure, sustainable, and technology-driven agricultural sector in India.
