Pradhan Mantri Fasal Bima Yojana (PMFBY)

What is PMFBY?

Pradhan Mantri Fasal Bima Yojana is the flagship scheme of the government for agricultural insurance in India in line with the ONE NATION- ONE SCHEME theme.

• Annual Commercial / Annual Horticultural crops, oilseeds and food crops (Cereals, Millets and Pulses) are covered under the scheme.
• PMFBY is optional for the farmers who have not availed institutional credit, while all the farmers who have borrowed institutional loans from banks are covered under the scheme mandatorily.

What is covered under PMFBY?

The Pradhan Mantri Fasal Bima Yojana will cover the following cases under crop insurance:

• Local natural calamities like landslides, hailstorms, etc.
• Calamities leading to loss of yield like floods, dry spells, droughts, etc. Pest infestation that causes yield loss is also covered by PMFBY.
• Losses occurred after harvesting crops can also be covered under this scheme. These circumstances may befall due to cyclones, unseasonal rains, cyclonic rains, etc.
• It is proposed by the scheme to use remote sensing technology, smartphones or drones to expedite the crop loss estimation.

Objectives of PM FBY

Pradhan Mantri Fasal Bima Yojana (PMFBY) aims at supporting sustainable production in agriculture sector by way of

1. Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events.
2. Stabilizing the income of farmers to ensure their continuance in farming.
3. Encouraging farmers to adopt innovative and modern agricultural practices.
4. Ensuring flow of credit to the agriculture sector which will contribute to food security,
5. crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from production risks.

Problems in implementing PM FBY

1. Non-receipt of premium subsidy by insurance companies from the State government is highlighted as reason for delay in settling claims.
2. The major problem of the PMFBY scheme is crop cutting experiments (CCEs).

• As many as 70 lakh CCEs need to be carried out in a short span of 2 to 3 weeks across the country to assess the crop yield, which is then used to calculate insurance claims. It is a logistical nightmare for government.
• Disputes relating to not conducting CCEs in a proper manner has been one of the major reasons for inordinate delays in claim settlements.

1. Farmers in most States are unhappy with the fact that the governments have made PMFBY compulsory for availing crop loans.
2. Clusters are awarded to an insurance company on the basis of bids do to driving down the premium. On the contrary, cartelization across clusters leads to high premiums.
3. Local officials often collude with farmers to inform them about the plots chosen for CCEs 50-60 days in advance. The farmers then deliberately avoid taking care of the field, leading to a poor crop. such fudging of data is leads to higher claims driving premiums up.
4. No use proposed remote sensing technology, smartphones or drones to expedite the crop loss estimation.
5. Delays in payment of claims. Thus effectively farmers still remain in financial distress, defeating very purpose of scheme.