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).
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.
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.
The salient features and benefits of the PMFBY are as follows:
The premium rate for PMFBY is the same for all farmers. We’ve discussed the premium rates in the article further.
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.
Latest technology is used to capture and upload data of the loss/damage to the product, reducing the delay in claim settlements.
Enrolment of the beneficiaries, awareness of the scheme, and claim processing is managed by a single insurance company.
The scheme provides on-account claim payment to the farmers if their produce faces local losses.
In case of adverse weather conditions and unseasonal rains, crop loss is assessed on an individual plot basis.
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.
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) |
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.
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 |
|
Voluntary Coverage |
The scheme is optional for loanee farmers. |
Risk Covered |
Besides the loss caused to crops, the scheme also covers:
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. |
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
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.
Go to the PMFBY portal https://pmfby.gov.in/.
Click on the ‘Register’ option.
Enter personal and other requested details.
Verify your Aadhaar Card (automatically verified) and Contact number (via OTP verification).
Once the application for PMFBY is submitted, it will be approved/rejected by the upper hierarchy.
The applicant will be notified of the decision via an SMS or email.
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 |
|
In case of prevented sowing, planting, and germination risk |
|
In case of loss to standing crops (from sowing to harvesting) |
|
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 |
|
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.
The PMFBY covers the following types of crops:
Food crops (Cereals, Millets and Pulses)
Oilseeds
Yearly Commercial/Horticultural crops
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%.
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.
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.