All You Need to Know About Pradhan Mantri Fasal Bima Yojana (PMFBY)

Crop insurance is a type of insurance that protects against loss of crops due to natural calamities or loss of revenue that rose from a price reduction of agricultural commodities. The Government of India introduced one such crop insurance named Pradhan Mantri Fasal Bima Yojana (PMFBY).

Read on to learn about PMFBY in detail!

What Is Pradhan Mantri Fasal Bima Yojana (PMFBY)?

The Government of India launched the Pradhan Mantri Fasal Bima Yojana (PMFBY), a large scale crop subsidy insurance scheme to protect farmers. This scheme replaced the existing two schemes, i.e., National Agricultural Insurance Scheme (NAIS) and the Modified NAIS (MNAIS). This new crop insurance aligns with the One Nation – One Scheme Theme.

Pradhan Mantri Fasal Bima Yojana extends coverage for the whole cropping cycle, i.e. pre-sowing to post-harvest and midseason adversities. In addition, it also covers the financial loss that can occur due to unforeseen events such as crop failure due to unexpected rainfall, pest infestations and so on.

The Government of India has designed this new crop insurance with the best features and eliminated all the shortcomings of the previous operating schemes.

The Department of Agriculture, Cooperation and Farmers’ Welfare under the Ministry of Agriculture, along with partnered general insurance companies, administrates PMFBY.

Objectives of Pradhan Mantri Fasal Bima Yojana

The Pradhan Mantri Fasal Bima Yojana aims to achieve the following targets:

Offer economical insurance coverage against crop failure, damage, loss and financial support.
Ensure steady incomes among farmers and continuity in agricultural production.
Motivate farmers to adopt innovative and latest agricultural practices.
Ensure enough credit to the agriculture sector.

Highlights of Pradhan Mantri Fasal Bima Yojana

Here are the highlights of the Pradhan Mantri Fasal Bima Yojana:

To avail benefits offered under PMFBY, farmers have to pay premiums (very low, ranging from 1.5% -to 5%). The Government (Central and State) will share the balance premium even if the balance is 90%.
Farmers will get a claim against the full sum insured without any deduction.
This scheme focuses on the use of technology. Smartphones are used to upload data of crop cutting so that there will be fewer delays in claim payment to individuals involved in farming. In addition, PMFBY stresses the usage of remote sensing for decreasing crop cutting experiments.

What Are the Types of Risks Covered Under PMFBY?

The Pradhan Mantri Fasal Bima Yojana covers the following risk:

Yield Losses (Standing Crops): The Government provides this insurance coverage for yield losses that fall under the non-preventable risks, such as Natural Fire and Lightning: Storm, Hailstorm, Tornado etc.: Flood, Inundation and Landslide; Pests/ Diseases, etc.; Drought etc.
Prevented Sowing: Cases may arise where most of the farmers (insured )of notified areas may want to plant or sow. In such cases, they have to bear the expenditure for that cause and are restricted from planting or sowing insured crops because of unfavourable weather conditions. These farmers will then become eligible for the indemnity claims of up to a maximum of 25% of the sum insured.
Post-harvest Losses: The Government provides for post-harvest losses on an individual farm basis. The Government offers coverage of up to 14 days (maximum) from harvesting for crops that are stored in “cut and spread” condition. It means that the Government covers farmers who have put the crops to become sun-baked in the field after harvesting that have been destroyed due to cyclone or cyclonic rains occurred across the country.
Localised Calamities: The Government provides for localised calamities on an individual farm basis. Risks such as loss or damage arising from identified localised hazards, such as hailstorms, landslides, and inundation impacting separated farmlands in the notified area comes under this coverage.

What Are the Premiums under the Pradhan Mantri Fasal Bima Yojan?

To enjoy the insurance benefits provided under this scheme, farmers must pay a nominal share of the following actuarial premiums:

Kharif crops (2%)
Rabi crops (1.5%)
Commercial crops (5%)
Horticultural crops (5%)

The state and central governments bear the rest of the actuarial premium, i.e., 95-98.5% and shares on a 1:1 ratio.

For instance, if a farmer has a sum of ₹ 35,000 and land insured of 1 hectare, the insurance companies will charge the actuarial premium of ₹ 4,000.

Here, if the farmer harvests Kharif crops on the insured land, then he must pay 2% of the actuarial premium (as per the list mentioned above), which stands at ₹ 800.

The remaining amount of ₹ 3,200 will be shared on a 1:1 basis meaning the State and Central Governments will each pay ₹ 1,600 to the insurance company.

Farmer’s principal	₹ 35,000
Farmer’s land	1 hectare
Actuarial premium from insurance companies	₹ 4,000
Premium rate for Kharif crops	2%
Premium per month	₹ 800
Remaining amount	₹ 3,200
Ratio of distribution between State and Central Governments	1:1
Amount payable to the insurance company	₹ 1,600

What Is the Eligibility Criteria of Pradhan Mantri Fasal Bima Yojana?

As per the eligibility parameters set by the Government, all farmers, including sharecroppers and tenant farmers cultivating notified crops in the notified areas, can get coverage under PMFBY, given they have insurable interest for the insured crops.

How to Apply Pradhan Mantri Fasal Bima Yojana (PMFBY) Online?

Here is a step-by-step guide on the application procedure for PMFBY online.

Step 1 – Visit the official website of Pradhan Mantri Fasal Bima Yojana.

Step 2 – Click on ‘Farmer’s Corner’ to apply for crop insurance yourself.

Step 3 – Log in with your mobile number. Alternatively, you can log in as Guest Farmer if you do not have an account.

Step 4 – Provide required details.

Step 5 – Follow the instructions and click on submit to complete the application procedure.

What Are the Documents Required for Pradhan Mantri Fasal Bima Yojana?

Following is a list of documents farmers have to gather while applying for the Pradhan Mantri Fasal Bima Yojana.

Address proof like driving licence, voter ID card, passport or Aadhaar card
Identity proof of the farmer such as PAN card, driving licence, voter ID card, passport, Aadhaar card.
Photocopy of field Khasra number or account number.
Proof of sowing of crops in the field.
A cancelled cheque is required along with all the papers.

How to Report Crop Loss and Claim Insurance?

The process of reporting crop loss and claim insurance is very simple and straightforward. Farmers can easily report crop loss within 72 hours of such an incident at CSC Centre or to the nearest Agricultural office. Alternatively, they can complete the report through the Crop Insurance App.

After verification, eligible farmers will receive claim benefits in the bank account sent electronically.

What Are the Revised Operational Guidelines for Pradhan Mantri Fasal Bima Yojna (PMFBY)?

The Government modified the operational guidelines that came to effect on 1st October 2018.

The new guidelines are as follows:

Insurance Companies (ICs) and Banks will pay a 12% interest rate to farmers for late (exceeding two months of the prescribed cut-off date) settlement claims.
The same rule applies to the State Government. The State's higher authority will have to pay a 12% interest rate for late release (beyond three months) of the State’s share.
Adding of Perennial horticultural crops under PMFBY. This inclusion must occur on a (on a pilot basis.
Hailstorms must be included in the post-harvest losses along with other causes.
Cloud burst and natural fire must be added in the localised calamities along with other causes.
Additional coverage for crop loss because of wild animals attack (on a pilot basis). The concerned State Government will bear these additional financial liabilities as well.
Thorough SOP for Performance evaluation of ICs and their de-empanelment.
Capturing of Aadhaar number is mandatory for reducing duplicacy.
Non-loanee farmers must get a 10% incremental increase in coverage.
Definition of Major Crops, Unseasonal rainfall and Inundation are there to enhance clarity of these terms and give proper coverage.
Respective authority must release an upfront premium subsidy based on 50% of, 80% of the total share of subsidy of the corresponding season of the last year as GOI/State subsidy at the beginning of the season.

Note: In such cases, companies need not provide any projections for the advance subsidy. However, during the second instalment – the calculation of balance premium will occur on the basis of an approved business statistics on the portal for claims settlement. Lastly, final instalment will occur after reconciliation of whole coverage data on the portal on the basis of final business statistics available on the portal.

The States has given permission to take a decision for including crops with high premium for calculation of L1 calculation and for notification.
Rationalising the calculation procedure of TY is essential
Moving average of best 5 out of 7 years for calculation of claim amount.
Separate Budget Allocation for Administrative expenses (at least 2% of the budget of the scheme).
Timeline for declaration of prevented sowing
Penalties/ Incentives for States, ICs and Banks
Performance evaluation of ICs and their de-empanelment.
Detailed SOP for dispute redressal regarding yield data/crop loss.
Detailed SOP for claims estimation w.r.t. Add on products, i.e. Midseason adversity, prevented/failed sowing, post-harvest loss and localised claims
A detailed plan for publicity and awareness- earmarked expenditure-0.5% of Gross premium per company per season.
Detailed SOP for Area Correction factor
Detailed SOP for Multi picking crops.
Use of RST in clustering/Risk classification.
Settlement of claims without waiting for the Second instalment of final subsidy.
The settlement of Yield based claims must be based on the subsidy provided on provisional business data.
To determine the cut-off date for enrollment, creating a district and crop-wise crop calendar is necessary. This is applicable for major crops only.
More time will be given for changing crop names for insurance.
The insured farmer will get additional time to inform individual claims. Now farmers will get 72 hours (instead of 48 hours) to inform their claims directly on a portal or via any stakeholders.

Comparison with Previous Schemes

Here is a comparative analysis of previous schemes mentioned in a table format:

Feature	NAIS (National Agricultural Insurance Scheme-1999)	MNAIS (Modified National Agricultural Insurance Scheme- 2010)	Pradhan Mantri Crop Insurance Scheme
Premium rate	Low	High	Lower than even NAIS (Govt to contribute 5 times that of a farmer)
On Account Payment	No	Yes	Yes
Awareness	No	No	Yes (target to double coverage to 50%)
Use of Technology (for quicker settlement of claims)	No	Intended	Mandatory
One Season – One Premium	Yes	No	Yes
Post-harvest Losses coverage	No	Coastal areas - for cyclonic rain	All India – for cyclonic + unseasonal rain
Prevented Sowing coverage	No	Yes	Yes
Localised Risk coverage	No	Hail storm, Landslide	Hail storm, Landslide, Inundation
Insurance Amount cover	Full	Capped	Full

In India, farmers now have the support of advantageous crop insurance such as PMFBY. Subsequently, it is imperative for farmers to know the premium rates, application process, and other important details of Pradhan Mantri Fasal Bima Yojana so that they continue farming without worrying about crop losses.`

Frequently Asked Questions

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Which companies provide crop insurance?

Companies like Agriculture Insurance Company, Cholamandalam MS General Insurance Company, Reliance General Insurance Co. Ltd., Bajaj Allianz, and Future Generali India Insurance Co. Ltd. provide crop insurance. The list also includes HDFC ERGO General Insurance Co. Ltd., IFFCO Tokio General Insurance Co. Ltd., Universal Sompo General Insurance Company, ICICI Lombard General Insurance Co. Ltd. Further, Tata AIG General Insurance Co. Ltd., SBI General Insurance, and United India Insurance Co. joined hands in offering crop insurance.

Can I calculate the insurance premium for Pradhan Mantri Fasal Bima Yojana by using a calculator?

Yes, you can calculate the insurance premium of Pradhan Mantri Fasal Bima Yojana by using a calculator. The official website of PMFBY features insurance where farmers have to select season, year, scheme, state, district, and crop and click on ‘Calculate’. The result will appear on the screen instantly.

What type of coverage of crops is provided under PMFBY?

There are three coverages of crops provided under PMFBY Food crops (Cereals, Millets and Pulses), Oilseeds, and Annual Commercial / Annual Horticultural crops.

Where do I check the application status of PMFBY?

You can check the application status of Pradhan Mantri Fasal Bima Yojana at the official website of PMFBY.

Where can I send queries regarding PMFBY?

You can send queries regarding Pradhan Mantri Fasal Bima Yojana at the email address help.agri-insurance@gov.in.