The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a crop insurance scheme launched by the Government of India to provide comprehensive insurance coverage and financial support to farmers in case of crop loss due to various factors. PMFBY replaced several earlier crop insurance schemes, including the National Agriculture Insurance Scheme (NAIS), to streamline and improve the effectiveness of crop insurance in India.
Key features of PMFBY:
Object ive:The primary objective of PMFBY is to reduce the financial burden on farmers due to crop losses by providing them with insurance coverage for various perils such as natural calamities, pests, and diseases.
Coverage: PMFBY covers a wide range of crops, including food crops, oilseeds, and horticultural crops. Both Kharif and Rabi crops are included under the scheme.
Premium Sharing: The premium for the insurance is shared among farmers, the central government, and the state government. The farmers’ premium share is kept low to make it affordable for all farmers.
Sum Insured: The sum insured is based on the scale of finance, which represents the total cost involved in cultivating a particular crop on a unit area basis.
Technology Integration: PMFBY leverages technology for efficient implementation. It includes online enrollment, crop cutting experiments (CCEs) using technology for accurate yield assessment, and faster claim settlement.
Timely Compensation: In case of crop loss, farmers are eligible for compensation based on predefined parameters and conditions. The claim settlement process is designed to be prompt and efficient.
Risk Coverage: PMFBY covers various risks such as drought, excess rainfall, hailstorms, cyclones, pests, and diseases, which can lead to crop yield losses.
Voluntary Participation: The scheme is voluntary for all farmers, but states are encouraged to promote wider adoption.
Area Approach: PMFBY adopts an “area approach” for insurance, where the entire defined area (gram panchayat or unit of insurance) is considered for claim assessment rather than individual farmer losses.
Insurance Companies: The scheme is implemented through various insurance companies that are selected through a bidding process. These companies assess and process claims based on defined guidelines.
Aadhaar Integration: Aadhaar authentication is used to ensure transparency and prevent duplicate claims.
Premium Subsidy: The central and state governments provide premium subsidies to reduce the financial burden on farmers.
Improvement Over Earlier Schemes: PMFBY addressed some of the limitations of earlier crop insurance schemes, such as delays in claim settlement and administrative inefficiencies.
Affordability: PMFBY is designed to keep the insurance premium affordable for farmers. The premium rates are kept low through a combination of government subsidies and cost-sharing between the central government, state government, and farmers.
Transparency: The use of technology and Aadhaar authentication enhances transparency in the implementation of the scheme. This helps in preventing fraud and ensuring that the benefits reach the intended beneficiaries.
Encouraging Agriculture: By providing a safety net against crop losses, PMFBY encourages farmers to take up agricultural activities without the fear of catastrophic financial losses, thereby promoting agricultural productivity and growth.
Financial Security: The scheme offers financial security to farmers, enabling them to invest in modern farming techniques, purchase high-quality inputs, and adopt better agricultural practices, leading to improved yields and higher income potential.
Reducing Indebtedness: Crop losses can often lead to indebtedness among farmers who need to borrow money to recover from the losses. PMFBY helps in reducing this debt burden by providing timely compensation.
Social Security: PMFBY contributes to the social and economic well-being of farmers and their families by ensuring that they are not left financially vulnerable in times of crop failure.
Promoting Farmer Welfare: The overarching objective of PMFBY is to enhance the overall welfare of farmers by providing them with a comprehensive and effective insurance mechanism to deal with the uncertainties of agricultural production.
Some of the key schemes that have played a role in shaping PMFBY include:
National Agriculture Insurance Scheme (NAIS): PMFBY builds upon the foundation of the NAIS, which was one of the earlier crop insurance schemes in India. PMFBY incorporates some of the concepts from NAIS, such as providing insurance coverage against crop loss due to various natural and man-made factors.
Weather-Based Crop Insurance Scheme (WBCIS): The WBCIS was another crop insurance scheme in India that focused on insuring crops against specific weather events like excess rainfall, drought, and temperature fluctuations. PMFBY’s coverage against various perils, including weather-related risks, can be seen as a continuation of this concept.
Modified National Agriculture Insurance Scheme (MNAIS): MNAIS was introduced to improve upon the NAIS by addressing its limitations and streamlining the process. Some of the improvements made in MNAIS are reflected in the structure and implementation of PMFBY.