Pradhan Mantri Fasal Bhima Yojana

Introduction to Pradhan Mantri Fasal Bima Yojana

The agricultural sector is the backbone of the Indian economy, providing employment to millions of people and contributing significantly to the country’s GDP. However, agriculture is a high-risk business, with farmers facing numerous challenges such as crop failures due to natural calamities, pests and diseases, and price fluctuations in the market. To address these challenges and provide financial security to farmers, the Government of India launched the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2016.

PMFBY is a crop insurance scheme aimed at providing financial support to farmers in the event of crop failure due to natural calamities, pests and diseases, and other unforeseen events. The scheme covers all food and oilseed crops, as well as commercial and horticultural crops. It also covers post-harvest losses due to cyclones, unseasonal rains, and other natural calamities.

Under the PMFBY scheme, farmers can insure their crops at very nominal rates, which vary depending on the type of crop and the region. The premium rates are fixed by the government and are subsidized to a large extent, with farmers having to pay only a small portion of the premium. The remaining premium is paid by the government.

To be eligible for the scheme, farmers need to fulfill certain criteria such as having a bank account and cultivating crops in the notified areas. The enrollment process for the scheme is simple and can be done through the respective banks or insurance companies.

In case of any crop loss, the farmers need to report it to the concerned authorities within 72 hours of the loss. The crop loss assessment is done by a team of experts, and the claim amount is disbursed within 15 days of the assessment. The scheme ensures timely settlement of claims, which helps farmers to quickly recover from crop losses.

PMFBY has several benefits for farmers. Firstly, it provides them with financial protection against crop losses due to natural calamities, which is a major risk faced by farmers in India. Secondly, it ensures timely settlement of claims, which helps farmers to quickly recover from crop losses. Finally, it promotes the use of modern agricultural practices, as farmers need to follow certain guidelines to be eligible for insurance.

The PMFBY scheme has played a significant role in ensuring food security in the country by promoting sustainable agriculture practices. It has helped to mitigate the financial risks faced by farmers in India and has provided them with a safety net in case of crop failures. However, the scheme also has some limitations and challenges, such as inadequate coverage of non-loanee farmers and low awareness levels among farmers.

Overall, PMFBY is an important scheme that has helped to mitigate the financial risks faced by farmers in India. It has played a significant role in ensuring food security in the country by promoting sustainable agriculture practices. The scheme has its limitations and challenges, but it is a step in the right direction towards providing financial security to farmers and promoting sustainable agriculture practices in India.

Eligibility Criteria for Farmers

The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a crop insurance scheme launched by the Government of India to provide financial support to farmers in case of crop loss due to natural calamities, pests and diseases, and other unforeseen events. The scheme aims to mitigate the financial risks faced by farmers and promote sustainable agriculture practices in the country.

To be eligible for the PMFBY scheme, farmers need to fulfill certain criteria. Here are the eligibility criteria for farmers:

  1. Cultivation of notified crops: The PMFBY scheme covers all food and oilseed crops, as well as commercial and horticultural crops. However, only the notified crops are eligible for insurance coverage. The list of notified crops is prepared by the state governments and is updated every year.
  2. Cultivation in notified areas: The PMFBY scheme is implemented in specific areas that are notified by the state governments. The scheme is not available for crops cultivated in non-notified areas.
  3. Farmer’s share of premium: The farmer’s share of premium is a mandatory requirement for enrollment in the PMFBY scheme. The premium rates are fixed by the government and are subsidized to a large extent, but farmers need to pay a small portion of the premium. The remaining premium is paid by the government.
  4. Bank account: To be eligible for the PMFBY scheme, farmers need to have a bank account. The claim amount is directly credited to the farmer’s bank account, which ensures transparency and timely disbursement of claims.
  5. Adherence to crop insurance guidelines: To be eligible for insurance coverage, farmers need to follow certain guidelines related to crop cultivation and management. These guidelines are aimed at promoting sustainable agriculture practices and reducing the risk of crop loss due to natural calamities and other factors.
  6. Loanee and non-loanee farmers: The PMFBY scheme provides insurance coverage to both loanee and non-loanee farmers. However, the coverage for non-loanee farmers is limited to the sum insured for the crop.
  7. Enrollment process: The enrollment process for the PMFBY scheme is simple and can be done through the respective banks or insurance companies. Farmers need to submit their details and the details of their crops to enroll in the scheme.

Premium Rates and Subsidies

Premium Rates

The premium rates for the PMFBY scheme are fixed by the government and are based on the sum insured for the crop. The premium rates are calculated based on the historical yield data, the crop sown area, and the premium rate charged in the previous years. The premium rates for different crops are different and are decided by the government in consultation with the insurance companies.

The premium rates are divided into two categories: Kharif season and Rabi season. For Kharif crops, the premium rates are 2% of the sum insured for food crops and 1.5% of the sum insured for oilseeds. For Rabi crops, the premium rates are 1.5% of the sum insured for food crops and 2% of the sum insured for oilseeds. The premium rates for commercial and horticultural crops are 5% of the sum insured for both Kharif and Rabi seasons.

There are many farmers with smiling face and other side a farmer with tech mini - helicopter to serve crop

Subsidies

The PMFBY scheme provides subsidies to farmers to make the premium rates affordable. The subsidies are provided by the central and state governments in the ratio of 50:50 for all crops except for horticultural and commercial crops, where the ratio is 60:40. This means that the central government pays 50% or 60% of the total premium amount, depending on the crop, and the state government pays the remaining amount.

For small and marginal farmers, the government provides an additional subsidy of 2% for Kharif crops and 1.5% for Rabi crops. This subsidy is provided to encourage small and marginal farmers to participate in the scheme.

The subsidy is also provided to the insurance companies, which are selected by the government to implement the scheme. The insurance companies are provided with a subsidy of 11% of the total premium amount for Kharif crops and 12% of the total premium amount for Rabi crops. This subsidy is provided to compensate the insurance companies for the losses incurred in implementing the scheme.

Coverage of Crops

Coverage of Crops

The PMFBY scheme covers a wide range of crops, including food crops, oilseeds, and horticultural crops. The scheme covers all crops notified by the government for each season, and the list of crops covered is revised annually based on the recommendations of the state governments.

The coverage under the PMFBY scheme is available for the entire crop cycle, from sowing to harvesting. The sum insured under the scheme is based on the estimated cost of cultivation and varies according to the type of crop and the season. The scheme also provides coverage for post-harvest losses for a specific period after harvesting.

A farmer to see the crop of wheat and to know about the this yojana

Enrollment Process and Claim Settlement

Enrollment Process

The enrollment process for the PMFBY scheme is simple and farmer-friendly. The scheme is implemented by the state governments in collaboration with insurance companies. The farmers can enroll in the scheme through various channels, including Common Service Centres (CSCs), bank branches, and the online portal of the insurance company.

The farmers need to provide their basic details, including Aadhaar number, bank account details, and details of the crop for which they are seeking coverage. The premium rates for the scheme are fixed by the government and vary according to the type of crop and the season. The premium rates are subsidized by the government, and the farmers need to pay only a nominal premium amount, which is usually 2% of the sum insured for Kharif crops and 1.5% of the sum insured for Rabi crops.

In this image we see the farmer with headline of Pradhan Mantri Fasal Bima Yojana

Once enrolled, the farmers receive a policy document containing the details of coverage, sum insured, premium amount, and terms and conditions of the scheme.

Claim Settlement

The claim settlement process under the PMFBY scheme is prompt and transparent. The farmers can report the crop loss to the insurance company or the concerned government authorities within 72 hours of the occurrence of the loss. The loss assessment is conducted by the insurance company or the government authorities, and the claim settlement is done based on the assessed loss.

Under the PMFBY scheme, the claims are settled within a specific time frame, usually within two weeks of the receipt of the claim. The payment of the claim amount is made directly to the bank account of the insured farmer through direct benefit transfer (DBT) mode.

The PMFBY scheme also provides for the appointment of nodal officers at the district level to facilitate the claim settlement process and to address the grievances of the farmers, if any. The scheme also provides for the establishment of an online portal to track the status of the claim settlement and to provide information about the scheme to the farmers.

Benefits of Pradhan Mantri Fasal Bima Yojana

  1. Financial Security: The PMFBY scheme provides financial security to the farmers in case of crop loss due to various risks. The scheme ensures that the farmers are compensated for their losses, and they do not have to bear the burden of the losses alone. This provides a safety net for the farmers and helps them to manage the financial risks associated with farming.
  2. Affordable Premiums: The premium rates for the PMFBY scheme are fixed by the government and are subsidized to a large extent. The farmers need to pay only a nominal premium amount, which is usually 2% of the sum insured for Kharif crops and 1.5% of the sum insured for Rabi crops. This makes the scheme affordable for small and marginal farmers who may not be able to afford expensive crop insurance schemes.
  3. Wide Coverage: The PMFBY scheme covers a wide range of crops and risks, including natural calamities, pests and diseases, and other unforeseen events. The scheme covers both pre-sowing and post-harvest losses, and it provides coverage for localized risks as well. This ensures that the farmers are protected against a variety of risks, and they can continue to engage in farming activities without the fear of financial losses.
  4. Timely Settlement of Claims: The claim settlement process under the PMFBY scheme is prompt and transparent. The claims are settled within a specific time frame, usually within two weeks of the receipt of the claim. The payment of the claim amount is made directly to the bank account of the insured farmer through direct benefit transfer (DBT) mode. This ensures that the farmers receive timely compensation for their losses and they do not have to wait for a long time to receive the claim amount.
  5. Promotion of Sustainable Agriculture: The PMFBY scheme promotes sustainable agriculture practices by providing financial support to farmers who adopt such practices. The scheme provides incentives to farmers who practice crop diversification, use of organic fertilizers, and other sustainable practices. This helps in improving soil health, reducing the use of chemical fertilizers and pesticides, and promoting sustainable agriculture practices in the country.
In this image we see the photo of pm modi and other side a farmer with his family who got the benefit through this yojana.

Impact of the Scheme on Agriculture and Rural Development

we will discuss the impact of the PMFBY scheme on agriculture and rural development.

  1. Increased Financial Security: The PMFBY scheme has provided increased financial security to farmers, especially small and marginal farmers, who are most vulnerable to crop losses due to various risks. The scheme has helped farmers to manage the financial risks associated with farming, and it has reduced the burden of crop losses on them. The increased financial security has also encouraged farmers to adopt new and modern agricultural practices, which have further contributed to the development of agriculture and rural areas.
  2. Improved Crop Yield: The PMFBY scheme has also contributed to the improvement of crop yield in the country. The scheme has incentivized farmers to adopt better farming practices, which have resulted in increased crop yield. The scheme has also provided financial support to farmers for the use of high-quality seeds, fertilizers, and other inputs, which have further contributed to the improvement of crop yield.
  3. Reduced Distress Migration: The PMFBY scheme has reduced distress migration from rural to urban areas. In the absence of any financial support, farmers who face crop losses due to various risks are forced to migrate to urban areas in search of livelihoods. However, the PMFBY scheme has provided financial support to farmers in case of crop losses, which has reduced the need for distress migration. This has helped to retain the workforce in rural areas and has contributed to the development of the rural economy.
  4. Promotion of Sustainable Agriculture: The PMFBY scheme has promoted sustainable agriculture practices in the country. The scheme has provided incentives to farmers who practice crop diversification, use of organic fertilizers, and other sustainable practices. This has helped to improve soil health, reduce the use of chemical fertilizers and pesticides, and promote sustainable agriculture practices in the country. The scheme has also encouraged farmers to adopt new and modern agricultural practices, which have further contributed to the development of agriculture and rural areas.
  5. Improved Livelihoods of Farmers: The PMFBY scheme has improved the livelihoods of farmers in the country. The increased financial security, improved crop yield, and reduced distress migration have contributed to the overall improvement of the livelihoods of farmers. The scheme has also provided a safety net to farmers in case of crop losses, which has reduced the vulnerability of farmers to various risks.

Challenges and Limitations of the Scheme

While the Pradhan Mantri Fasal Bima Yojana (PMFBY) has been a significant step towards providing financial security to farmers in the country, the scheme has also faced several challenges and limitations. In this blog, we will discuss some of the major challenges and limitations of the PMFBY scheme.

  1. Limited Coverage of Crops: The PMFBY scheme has limited coverage of crops, which means that only a few crops are covered under the scheme. The scheme mainly covers major crops like rice, wheat, and sugarcane, leaving out minor crops, fruits, and vegetables. This limits the benefits of the scheme for farmers who grow crops that are not covered under the scheme.
  2. Unequal Benefit Distribution: The PMFBY scheme provides equal benefits to all farmers, regardless of their landholding and crop production. This means that small and marginal farmers who have limited landholding and crop production receive the same benefits as large farmers who have significant landholding and crop production. This often results in unequal benefit distribution, and small and marginal farmers may not receive adequate financial support under the scheme.
  3. High Premium Rates: The PMFBY scheme has high premium rates, which means that farmers have to pay a significant amount of money as premiums to avail the benefits of the scheme. This often makes it difficult for small and marginal farmers to participate in the scheme, as they may not be able to afford the premium rates.
  4. Delayed Claims Settlement: The PMFBY scheme has often faced issues with delayed claims settlement, which means that farmers have to wait for a long time to receive the benefits of the scheme. The delay in claims settlement often results in financial hardship for farmers, and it also affects their ability to invest in agriculture and promote sustainable practices.
  5. Limited Awareness among Farmers: The PMFBY scheme has limited awareness among farmers, especially small and marginal farmers, who may not be aware of the benefits of the scheme. This often results in low participation rates in the scheme, and many farmers who face crop losses due to various risks are not able to avail the benefits of the scheme.

Conclusion and Future Prospects.

Conclusion:

The Pradhan Mantri Fasal Bima Yojana (PMFBY) has been a significant step towards providing financial security to farmers in the country. The scheme has been successful in providing crop insurance to millions of farmers and has helped reduce the financial burden on them in case of crop losses. The scheme has also helped promote agricultural growth and rural development in the country.

However, the scheme has also faced criticisms and limitations, including limited coverage of risks, inadequate compensation, delayed claims settlement, and high premium rates. It is important for the government to address these criticisms and limitations and make necessary changes to improve the effectiveness of the scheme.

In this image we see a farmer to work in field related to this yojana

Future Prospects:

The future prospects of the PMFBY scheme look promising. With the implementation of the suggestions for improvement, the scheme can become more effective in providing financial security to farmers in the country. Some of the future prospects of the scheme are:

  1. Increasing Awareness: The government needs to increase awareness about the PMFBY scheme among farmers to encourage more farmers to participate in the scheme.
  2. Technology-Driven: The government needs to adopt technology-driven solutions to improve the effectiveness of the scheme. This includes using satellite technology for quick assessment of crop losses, mobile-based applications for enrollment and claims settlement, and real-time monitoring of weather conditions.
  3. Collaboration: The government needs to collaborate with other stakeholders, including insurance companies, banks, and state governments, to improve the effectiveness of the scheme and provide better services to farmers.
  4. Inclusion of New Risks: The government needs to continuously assess the risks faced by farmers and include new risks under the PMFBY scheme to ensure that farmers receive adequate financial support for all types of risks they face.
  5. Improving Implementation: The government needs to improve the implementation of the scheme to ensure timely enrollment, claims settlement, and premium collection. This will help increase farmer participation in the scheme and ensure that they receive the benefits of the scheme in a timely manner.

frequently asked questions (FAQs)

What is the Pradhan Mantri Fasal Bima Yojana (PMFBY)?

The Pradhan Mantri Fasal Bima Yojana is a crop insurance scheme launched by the government of India to provide financial support to farmers in case of crop losses due to natural calamities, pests, or diseases.

Who is eligible for the PMFBY scheme?

All farmers who have taken crop loans from banks or financial institutions are eligible to apply for the PMFBY scheme.

What is the premium rate for the PMFBY scheme?

The premium rate for the PMFBY scheme varies between 1.5% to 5% depending on the crop and the risk involved.

What is the coverage of the PMFBY scheme?

The PMFBY scheme covers all food crops, oilseeds, and annual commercial/horticultural crops for which past yield data is available.

What is the claim settlement process for the PMFBY scheme?

In case of crop losses, the farmer needs to inform the insurance company within 72 hours of the occurrence of the event. The insurance company then conducts a crop cutting experiment to assess the crop loss and settle the claim within 15 days.

What are the benefits of the PMFBY scheme?

The PMFBY scheme provides financial security to farmers in case of crop losses and helps promote agricultural growth and rural development in the country.

What are the criticisms of the PMFBY scheme?

The PMFBY scheme has faced criticisms for limited coverage of risks, inadequate compensation, delayed claims settlement, and high premium rates.

How can the PMFBY scheme be improved?

The PMFBY scheme can be improved by increasing awareness among farmers, adopting technology-driven solutions, collaborating with other stakeholders, including new risks, and improving the implementation of the scheme.

Can farmers enroll in the PMFBY scheme online?

Yes, farmers can enroll in the PMFBY scheme online through the government’s portal or mobile application.

Is the PMFBY scheme available in all states of India?

Yes, the PMFBY scheme is available in all states and union territories of India. However, the scheme’s implementation may vary between states based on their specific needs and requirements.

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