Pradhan Mantri Fasal Bima Yojana (PMFBY)

Food is one of our basic necessities. But did you know that agriculture is the livelihood of millions of people in India! The agricultural sector is highly volatile as many uncertain factors such as the weather, pests, crop diseases, and other incidences are likely to affect the production. To protect the hard-working farmers against such unforeseen events and loss of their crops, the Government of India launched an initiative known as the Pradhan Mantri Fasal Bima Yojana (PMFBY).

What is Pradhan Mantri Fasal Bima Yojana?

Pradhan Mantri Fasal Bima Yojana (PMFBY) is a Government of India initiative launched in 2016. The scheme offers coverage to farmers against financial losses they incur due to unforeseen events. The policy covers the loss of crops because of local risks, post-harvest financial loss, loss due to natural disasters, unseasonal rains, pests, crop diseases, and more.

The scheme works mainly under the ‘One Nation, One Crop, One Premium’ motto. It primarily aims to provide affordable crop insurance to the farmers of our nation.

Objectives of Pradhan Mantri Fasal Bima Yojana Scheme

The PMFBY policy supports sustainable agricultural production. It helps reduce the financial losses the farmers face due to crop failure, further stabilising their incomes. The idea behind this initiative is simple - when the farmers of our nations have a stable income to sustain their family and production, they can invest in better equipment for farming that yields better results for them in the near future.

We’ve enlisted a few objectives of the PMFBY scheme below.

  • Financial protection to farmers against loss/damages to their produce.

  • Stable income for farmers to ensure they can sustain their family and farming activities.

  • Encourage farmers to embrace new and modern farming practices.

  • Allow the flow of credit in the agricultural sector.

  • Protect farmers against production risks.

  • Offer affordable crop insurance.

  • Exemption of Goods and Service Tax from the scheme.

Features & Benefits of Pradhan Mantri Fasal Bima Yojana

The salient features and benefits of the PMFBY are as follows:

  • Uniform Premium Rate

The premium rate for PMFBY is the same for all farmers. We’ve discussed the premium rates in the article further.

  • High Coverage at a Low Premium Price

As seen above, the farmer’s share in the premium is very low. The government takes care of the remaining amount. This means farmers can avail extensive coverage at a lower premium price.

  • Use of Technology

Latest technology is used to capture and upload data of the loss/damage to the product, reducing the delay in claim settlements.

  • Single Management

Enrolment of the beneficiaries, awareness of the scheme, and claim processing is managed by a single insurance company.

  • On-Account Claim Payments

The scheme provides on-account claim payment to the farmers if their produce faces local losses.

  • Loss Assessment

In case of adverse weather conditions and unseasonal rains, crop loss is assessed on an individual plot basis.

Eligibility Criteria for Pradhan Mantri Fasal Bima Yojana

The PMFBY provides crop insurance to all farmers voluntarily for the produce recognised by the respective State Governments of the country. The eligibility criteria for the scheme is as follows:

  • Farmers (sharecroppers + tenant farmers) growing recognised crops in the notified areas can enrol for the scheme.

  • Eligible farmers should have an insurable interest in the recognised produce.

  • The non-loanee farmers are liable to submit the land records prevailing in the State - Record of Right (ROR), land possession certificate (LPC), etc. They can also submit supporting contracts, agreement details, or other documents issued by the concerned State Government.

Premium Rate Paid by Farmers to the Insurance Company

The following table gives an overview of the premiums to be paid by the farmers towards the PM Fasal Bima scheme.

Crop Type

Max Premium Payable by Farmers

(% Of Sum Insured)

Kharif

2% of the sum insured or actuarial rate (whichever is less)

Rabi

1.5% of the sum insured or actuarial rate (whichever is less)

Kharif & Rabi

5% of the sum insured or actuarial rate (whichever is less)

Enrolment Source for Pradhan Mantri Fasal Bima Yojana

The enrolment source for the PM Fasal Bima scheme depends on whether you are a loanee farmer or non-loanee farmer.

  • For Loanee Farmers: The enrolment source is banks

  • For Non-Loanee Farmers: The enrolment source is banks, communal service centres, National Agriculture Portal, Agriculture department office, or any authorised mediator of the scheme.

Coverage of Pradhan Mantri Fasal Bima Yojana

The following table gives a brief overview of the PMFBY scheme coverage.

Sum Insured of PMFBY

The insurance coverage under the scheme is equivalent to the sum insured determined by the Government of India.

Compulsory Coverage

  • Farmers with sanctioned Seasonal Agricultural Operations (SAO) loans from the financial institutes for notified crops.

  • Any changes in the crop plan should be informed to the bank at least two weeks before the cut-off date.

  • Insurance applications are accepted up to the cut-off date determined by the State Level Coordination Committee on Crop Insurance (SLCCCI).

Voluntary Coverage

The scheme is optional for loanee farmers.

Risk Covered

Besides the loss caused to crops, the scheme also covers:

  • Prevented sowing, planting, and germination risk: In case of adverse weather conditions or unseasonal rains, the insured area is prevented from sowing, planting, and germination.

  • Loss of standing crops (from sowing to harvesting): Unforeseen incidents that lead to loss of yield are covered under the scheme.

  • Post-harvest loss: After up to two weeks of harvesting, if there is any loss to the produce, the policy covers the same.

  • Loss due to localised disasters: Loss/damage to the produce due to localised risks such as hailstorms, landslides, cloud burst, animal attacks is covered as well.

Any damage/loss to the notified crops due to the risks mentioned above should be informed to the insurer within 72 hours of its occurrence.

Exclusions of Pradhan Mantri Fasal Bima Yojana

The scheme does not cover loss or damage to crops due to the following reasons.

  • Malicious activities

  • Preventable risks

  • Loss due to war or nuclear risks

How to Self-Register on the PMFBY Portal?

The government has provided a facility for farmers to self-register for the PMFBY scheme. Follow the steps below for a successful PMSBY online registration.

  1. Go to the PMFBY portal https://pmfby.gov.in/.

  2. Click on the ‘Register’ option.

  3. Enter personal and other requested details.

  4. Verify your Aadhaar Card (automatically verified) and Contact number (via OTP verification).

  5. Once the application for PMFBY is submitted, it will be approved/rejected by the upper hierarchy.

  6. The applicant will be notified of the decision via an SMS or email.

Claim Process for Pradhan Mantri Fasal Bima Yojana

The claim process is based on the risks faced. The following table gives an overview of the same.

 

Claim Process

In case of loss/damage to the yield

  • The concerned State Government conducts Crop Cutting Experiments (CCEs) at each insured area. The yield data is shared with the insurer within the specified period. The claim compensation is calculated based on the data submitted.

  • The Threshold Yield (TY) is the benchmark yield up to which compensation shall be paid.

  • The TY of notified crops = Historical avg. yield for the best five out of the last seven years X Indemnity level.

  • Loss in Produce/Yield = (TY – Actual Yield) / TY X Sum Insured

In case of prevented sowing, planting, and germination risk

  • The concerned State Government informed the affected insured area suffering from prevented sowing or planting risk.

  • Weather data, satellite images and crop condition and area of sowing are used as proxy indicators.

  • Claims paid under this risk are 25% of the sum insured after which the insurance cover is terminated.

In case of loss to standing crops (from sowing to harvesting)

  • Here, the claim is raised against any loss/damage to standing crops due to adverse weather conditions, dry spells, drought damage, etc.

  • Also, the claim can be raised when the expected yield during the season is likely to be less than 50% of the normal yield.

  • The maximum claim compensation paid is up to 25%.

In case of post-harvest loss

The intimation of the claim should be made within 72 hours, either with the insurer or the government.

In case of loss due to localised calamities

  • The intimation of the claim should be made within 72 hours, either with the insurer or the government.

  • Proxy indicators used are weather reports and other related evidence.

Claim intimation in case of any of the above-mentioned losses should be given within the specified period via any of the following ways:

  • Call on the Toll-Free No. 180030024088

  • Reach out to the District Agriculture Office. A representative will connect with you and guide you through the process.

  • Reach out to the concerned banking institute.

The stipulated period for loss assessment and submission of the report is as follows:

  • Appointment of loss assessor within 48 hours after receiving the intimation

  • Loss assessment to be completed within the next 10 days

  • Claim settlement/payment to farmers to be completed in the next 15 days (if the premium payment is clear) from loss assessment report.

FAQs on PM Fasal Bima Yojana

  • ✔️What crops does the Pradhan Mantri Fasal Bima Yojana cover?

    The PMFBY covers the following types of crops:

    • Food crops (Cereals, Millets and Pulses)

    • Oilseeds

    • Yearly Commercial/Horticultural crops

  • ✔️What is the rate of premium to be paid by the farmer to the Insurance Company for PMFBY?

    Farmers are expected to pay a maximum of 2% on the sum insured as the premium amount for Kharif crops; whereas, the same is 1.5% for Rabi crops. For yearly commercial or horticultural crops, the premium is a maximum of 5%.

  • ✔️How is the sum insured decided in the Pradhan Mantri Fasal Bima Yojana scheme?

    The sum insured is usually equivalent to the Scale of Finance as decided by the District Level Technical Committee. It is predetermined by the SLCCCI and is declared to all the insured units.

  • ✔️How should the farmers pay the premiums for the Pradhan Mantri Fasal Bima Yojana scheme?

    Farmers can pay the premiums for the Pradhan Mantri Fasal Bima Yojana scheme via NEFT only. Demand drafts or cheques are not acceptable. Besides, the enrolment for the scheme is done online. There is no facility to submit an offline application for PMFBY.

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