Team AckoOct 23, 2023
Agriculture as an occupation is so prominent in India that, as per the Economic Survey 2021-22, it adds around 18% of the gross value (GVA) in India's economy. Thus, crops are an important asset not only for the farmers who cultivate them but also for the country. Farmers can insure this asset under the Pradhan Mantri Fasal Bima Yojana, which covers various perils associated with farming. The following article highlights important details of this government scheme
PMFBY scheme was launched on
PMFBY scheme launched by
Ministry of Agriculture and Farmers' Welfare
Bank Branch Directory
PMFBY Help Desk
PMFBY ( Pradhan Mantri Fasal Bima Yojana) is a government-backed crop insurance scheme in India that aims to provide financial protection to farmers against crop loss due to natural disasters, pests, and diseases. The scheme was launched in 2016 by the Ministry of Agriculture and Farmers' Welfare and is implemented through a network of insurance companies and banks. It is the largest agricultural insurance scheme in the world, covering over 50 crore farmers and providing insurance coverage for over 50 different crops.
One of the main objectives of PMFBY is to provide financial protection to farmers against crop loss due to natural disasters, pests, and diseases. In the past, farmers in India have often struggled to recover from crop failures due to insufficient financial resources, leading to debt and poverty. PMFBY aims to provide a safety net to farmers by compensating them for the loss of their crops, thus helping to reduce the risk of financial ruin.
Another critical objective of PMFBY is to encourage the adoption of modern farming techniques and technologies. By providing insurance coverage for a wide range of crops, the scheme encourages farmers to diversify their crops and adopt new techniques, such as precision farming, improving crop yields and reducing the risk of crop loss. This, in turn, can contribute to the overall development of the agricultural sector in India.
In addition to these objectives, PMFBY also aims to reduce the burden on farmers of paying premiums for crop insurance. To achieve this, the government subsidises a portion of the premium, intending to make the scheme more affordable for farmers. When farmers cannot pay the premium, the government provides a 100% subsidy.
To be eligible for coverage under the Pradhan Mantri Fasal Bima Yojana (PMFBY), farmers must meet certain criteria. Here is a list for your reference.
The farmer must be a cultivator or a sharecropper on the insured land.
Farmers must have a valid and authenticated land ownership certificate or a valid land tenancy agreement.
The farmer must have applied for insurance coverage within the prescribed time frame, which is generally within 2 weeks of the start of the sowing season.
They must not have received any compensation for the same crop loss from any other source.
They must have a valid Kisan Credit Card (KCC) or obtain one within six months of enrollment.
The farmer should have a valid bank account and provide details of their bank account, along with a valid identity proof, at the time of enrollment.
In addition to these criteria, farmers may also be required to meet certain conditions to be eligible for coverage. For example, they may be required to have a certain minimum acreage of land under cultivation or to have used approved seeds and other inputs.
Note: The eligibility criteria for PMFBY may vary depending on the specific terms and conditions of the insurance policy. Do consult with the authorities for more information on the specific eligibility criteria that apply to the policy.
Here are the coverage and premiums under PMFBY.
The Pradhan Mantri Fasal Bima Yojana (PMFBY) provides insurance coverage for various crops, including cereals, oilseeds, pulses, cotton, sugarcane, and horticultural crops. The specific yields covered under PMFBY may vary depending on the state in which the policy is being taken out, as different states may have other crops that are more prevalent.
Under PMFBY, farmers are insured against crop loss due to several perils, including natural disasters such as drought, flood, cyclone, and pests and diseases. The insurance coverage provided by PMFBY is based on the average yield of the crop, as determined through a system of crop-cutting experiments (CCEs) conducted by the government.
The sum insured is calculated as the average yield of the crop multiplied by the area under cultivation and the crop's minimum support price (MSP).\
The premiums for insurance coverage under PMFBY are calculated on a sliding scale, based on the type of crop and the region in which it is grown. The following table shows the premium for Pradhan Mantri Fasal Bima Yojana.
2% of the sum insured
1.5% of the sum insured
Kharif and Rabi
5% of the sum insured
The government subsidises a portion of the premiums for small and marginal farmers, with the balance being paid by the farmers themselves.
The government also pays the entire premium for farmers in North-Eastern states, Jammu and Kashmir, and Himachal Pradesh.
It is worth noting that PMFBY does not cover losses due to neglect or default on the part of the farmer, such as failure to use approved seeds or inputs.
The claim process for the Pradhan Mantri Fasal Bima Yojana (PMFBY) is designed to provide a quick and efficient way for farmers to receive compensation for crop loss. However, there have been challenges in the past with low claim settlement ratios, leading to delays and dissatisfaction with the scheme. To address these issues, the government has implemented a number of measures to streamline the claims process. Here is how the claim process of Pradhan Mantri Fasal Bima Yojana works.
In case of crop loss, farmers are required to file a claim with the insurance company within the prescribed time frame, which is generally within 72 hours of the occurrence of the loss.
The claim must be accompanied by supporting documents, such as photographs of the damaged crop and a report from the village-level committee (VLC) or the agriculture department, which verifies the extent of the loss.
Once the claim is filed, the insurance company will assess the claim based on the terms and conditions of the insurance policy and the extent of the crop loss. If the claim is approved, the farmer will receive a payout from the insurance company to compensate for the crop loss.
In cases where farmers are not satisfied with the outcome of their claim or if they face any issues with the claims process, they can file a complaint with the grievance cell established by the government. The grievance cell is responsible for handling and resolving complaints related to PMFBY.
It is important for farmers to be familiar with the terms and conditions of their insurance policy and to follow the prescribed process for filing a claim to ensure that their claim is processed smoothly.
Here are the advantages of Pradhan Mantri Fasal Bima Yojana (PMFBY).
PMFBY covers a wide range of crops, including food grains, oilseeds, horticultural crops, annual commercial/non-commercial crops, and plants and plantation crops. This means that a large number of farmers across the country can benefit from the scheme.
PMFBY provides affordable premiums for farmers, with the premium rate for most crops being just 2% for kharif crops and 1.5% for rabi crops. This helps to ensure that the insurance is accessible to a large number of farmers, even those with limited financial resources.
The scheme aims to settle claims within 30 days from the date of intimation of loss. This helps to ensure that farmers can get the financial support they need on time, enabling them to recover from crop loss and resume farming activities.
PMFBY uses technology to improve the efficiency and transparency of the insurance process. For example, the scheme uses satellite imagery to assess crop damage and calculate claims, which helps to reduce the time and effort required to process claims.
PMFBY helps farmers to manage the risks associated with farming, such as crop failure due to natural disasters or pests. By providing financial support in the event of crop loss, the scheme helps farmers to maintain their livelihoods and ensure the sustainability of their farming operations.
Reduced Premium Contributions:
PMFBY significantly reduces the financial burden on farmers by offering lower premium rates. Farmers contribute only 2% for Kharif crops, 1.5% for Rabi crops, and 5% for Annual and Commercial crops, making insurance more affordable.
Individualized Loss Assessment:
The scheme allows individualized assessment of losses, especially for localized perils like hailstorms, inundation, and landslides. This ensures fair compensation based on specific losses incurred by each farmer.
Plot-Based Yield Loss Assessment:
PMFBY enables yield loss assessment on a per-plot basis in cases of cyclones, cyclonic rains, and unseasonal rains across India. It covers damage to harvested crops left in the field for drying, up to 14 days post-harvest, ensuring accurate compensation.
Prompt On-Account Claim Payments:
Farmers receive on-account claim payments in case of prevented sowing or localized losses. This ensures timely financial support to cope with adverse conditions.
PMFBY promotes technology usage by employing smartphones to capture and upload crop data, reducing claim processing delays. Remote sensing technology minimizes the need for physical crop cutting experiments, streamlining the claims process.
Comprehensive Crop Insurance:
PMFBY provides comprehensive crop insurance coverage to farmers, protecting them against various perils and calamities that can lead to crop losses. Covered perils include drought, flood, cyclone, hailstorm, and more.
In case of crop damage or loss due to covered perils, farmers receive financial compensation. The scheme ensures that farmers do not face crippling financial setbacks when their crops are affected.
PMFBY reduces the premium burden on farmers. They are required to pay only a fraction of the total premium, making crop insurance affordable for them.
Loss assessment is done on an individual basis, ensuring that farmers are compensated for the specific losses they incur due to the insured perils. This individualized approach enhances the accuracy and fairness of claims settlements.
PMFBY applies to notified areas, and crop losses in non-notified areas are generally not covered. Farmers in areas not designated under the scheme may not receive compensation.
Losses Outside the Crop Cycle:
Crop losses occurring outside the specified crop cycle are often excluded from coverage. If a loss is not directly related to the growing season, it may not be eligible for compensation.
Negligence and Non-Compliance:
Losses resulting from farmer negligence, non-compliance with recommended agricultural practices, or failure to protect the crop adequately may be excluded.
Losses Beyond Specified Limits:
Some losses beyond specified limits or thresholds may not be covered. The scheme may have predefined criteria for determining the extent of loss that qualifies for compensation.
Farmers who fail to pay their premium contributions as required may not be eligible for coverage. Non-payment of premiums can result in the cancellation of insurance.
Damages to the crops due to war and related threats, nuclear risks, riots, deliberate destruction, theft, hostile conduct, grazing and/or destruction by livestock and/or wild animals are not covered. After harvesting, damage to the crop that is wrapped and stacked at a location before threshing and other preventable losses are not covered.
Farmers can enrol in PMFBY through their local Agriculture Department, by contacting a Common Service Center, or by visiting the farmer’s login page.
PMFBY is not mandatory for farmers, but it is strongly encouraged to handle the risks associated with farming and ensure financial protection in the event of crop loss.
Yes, however, the change should be communicated to the KCC/Crop-loan sanctioning bank branch as soon as possible, but no later than two days before the last date for premium debit or enrollment date. A certificate of sowing should be submitted to support this change.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes.
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