What is PMJBY?
The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016, is a crop insurance scheme aimed at providing comprehensive coverage to farmers against various risks associated with farming. Indian farmers face multiple challenges, like unpredictable rainfall, occasional unfavourable weather, pest infestation, and crop diseases. These can significantly impact crop yields in terms of quality and quantity, thereby affecting farmers' income.
To safeguard farmers against such uncertainties and provide financial security, the Government of India introduced the PMFBY. It replaced the existing National Agricultural Insurance Scheme (NAIS) and the Modified National Agricultural Insurance Scheme (MNAIS) to address the shortcomings of the previous schemes and enhance the financial security of farmers.
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Objectives of the Pradhan Mantri Fasal Bima Yojana (PMFBY):
- The primary goal of the Pradhan Mantri Fasal Bima Yojana (PMFBY) is to support sustainable agricultural production by:
- Providing financial assistance to farmers facing crop loss or damage due to unforeseen events.
- Stabilising farmers' income to ensure their continued engagement in farming.
- Encouraging the adoption of innovative and modern agricultural practices among farmers.
- Ensuring the flow of credit to the agriculture sector, contributing to food security, crop diversification, and enhancing the growth and competitiveness of the agriculture sector.
- Additionally, the scheme serves to protect farmers from production risks.
Eligibility for PMFBY:
All farmers who have been sanctioned Seasonal Agricultural Operations (SAO) loans (Crop Loans) from Financial Institutions (FIs), i.e., loanee farmers, for the notified crop(s) season are covered compulsorily.
The scheme is optional for non-loanee farmers.
Insurance coverage is equivalent to the sum insured per hectare, as defined by the government notification or on the National Crop Insurance Portal (NCIP), multiplied by the sown area for the notified crop.
Enrollment Process:
Both loanee and non-loanee farmers must be enrolled in NCIP, under the Ministry of Agriculture & Farmers' Welfare, New Delhi.
Banks providing Seasonal Crop Loans are responsible for uploading data in the NCIP for loanee farmers.
For non-loanee farmers, intermediaries, Common Service Centres (CSCs), farmers themselves, and other agencies are responsible for uploading data into the NCIP.
Crops covered:
The Pradhan Mantri Fasal Bima Yojana covers:
- Food crops (Cereals, millets, and pulses)
- Oilseeds
- Annual Commercial / Annual Horticultural crops
For perennial crops, coverage can be extended for those horticultural crops with a standard methodology for yield estimation.
Premium Rates:
The premium rates paid by farmers to the insurance company are as follows:
- Kharif (2%) and Rabi (1.5%): Food grains, including Cereals, Pulses, and Oilseeds
- 5%: Annual Horticulture and Commercial Crops
If the quoted premium rate by the insurance company after the bidding process is higher than the specified rates, the difference is shared by the State and Government of India at 50% each as a premium subsidy.
Financial Security in Times of Crisis:
One of the primary benefits of PMFBY is its ability to provide financial support to farmers facing crop losses or damages due to unforeseen events, such as natural calamities, pests, or diseases.
Stabilising Farmers' Income:
PMFBY plays a pivotal role in stabilising farmers' incomes and ensuring their continued engagement in agriculture. By mitigating the financial impact of crop losses, the scheme prevents farmers from falling into debt traps and safeguards their livelihoods.
Encouraging the Adoption of Modern Agricultural Practices:
The scheme incentivises farmers to embrace innovative and modern agricultural practices. By providing insurance coverage, PMFBY encourages farmers to adopt advanced technologies, efficient farming methods, and risk-mitigation strategies. This, in turn, contributes to increased productivity and the overall growth of the agricultural sector.
Enhancing Access to Credit:
PMFBY ensures a steady flow of credit to the agriculture sector, which is instrumental in fostering food security, crop diversification, and the competitiveness of the agricultural industry. With the assurance of financial protection through the insurance scheme, financial institutions are more inclined to extend credit to farmers, facilitating their investment in better seeds, fertilisers, and equipment.
Promoting Crop Diversification:
With the financial safety net provided by PMFBY, farmers are encouraged to diversify their crop portfolios. This diversification is economically beneficial for farmers and contributes to a more resilient and sustainable agricultural landscape.
Timely and Efficient Claims Settlement:
PMFBY emphasises a quick and transparent claims settlement process. Leveraging technology, such as satellite imagery and remote sensing, the scheme ensures accurate and timely assessment of crop losses. This efficiency in claims settlement boosts farmers' confidence in the scheme and reinforces its effectiveness.
Coverage of Risks and Exclusions:
Losses arising out of war and nuclear risks, malicious damage, and other preventable risks shall be excluded.
The Pradhan Mantri Fasal Bima Yojana is a testament to the government's commitment to the well-being of the agricultural community. Through its multifaceted benefits, PMFBY provides a safety net for farmers, empowering them to face the inherent risks associated with agriculture. As India strives for agricultural sustainability and resilience, PMFBY continues to be a key driver in ensuring the prosperity and financial security of the farmers who form the backbone of the nation.
