PRADHAN MANTRI FASAL BIMA YOJANA

PRADHAN MANTRI FASAL BIMA YOJANA

INTRODUCTION

India is the country of farmers since maximum proportion of rural population depends on agriculture and allied activities. In our country, farmers often face crop failure due to natural calamities, pests and diseases as a result they suffer economic losses.

In order to provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases; the hon’ble Prime Minister of India, Shri Narendra Modi launched the new scheme Pradhan Mantri Fasal Bima Yojana (PMFBY) on 13^th  January, 2016.

The scheme will decrease the burden of premiums on farmers who take loans for their cultivation and will also safeguard them against the inclement weather in case of crop failure. It has also been decided to make the settlement process of the insurance claim fast and easy so that the farmers do not face any trouble regarding the crop insurance plan. This scheme is to be implemented in every state of India, in association with respective State Governments.

The scheme will be administered under the Ministry of Agriculture and Farmers Welfare, Government of India.

 

FEATURES OF THE SCHEME

1. The farmers have to pay a uniform premium of only 2% for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid will be only 5%. Thus the premium rates to be paid by farmers are very low and balance premium will be paid by the Government to provide full insured amount to the farmers against crop loss in any natural calamities.
2. There is no upper limit on Government subsidy. Even if balance premium is 90%, it will be borne by the Government.
3. Earlier, there was a provision of capping the premium rate which is low claims being paid to farmers. Now this is removed and farmers will get claim against full sum insured without any reduction.
4. The use of technology will be encouraged to a great extent. Smart phones, Remote sensing drone and GPS technologies will be used to capture and upload data of crop cutting to reduce the delays in the claim payment.
5. The insurance plan is under single insurance company, Agriculture Insurance Company of India (AIC).
6. Pradhan Mantri Fasal Bima Yojana is a replacement scheme of National Agriculture Insurance Scheme (NAIS) and Modified National Agriculture Insurance Scheme (MNAIS) and hence exempted from the service tax.
   

 

OBJECTIVES OF THE SCHEME

• To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
• To stabilize the income of farmers to ensure their continuous process in farming.
• To encourage farmers to adopt innovative and modern agricultural practices.
• To ensure flow of credit to the agriculture sector.

 

FARMERS UNDER COVERAGE?

• All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage.
• All loanee farmers for the notified crops.
• The Scheme is optional for the non-loanee farmers. However the non-loanee farmers are required to submit necessary documentary evidence of land records permitted by concerned State Government.
  
  

WHICH CROPS ARE COVERED?

• Food crops (Cereals, Millets and Pulses)
• Oilseeds
• Annual Commercial / Annual Horticultural crops

 

WHAT TYPE OF RISK ARE COVERED?

Following stages of the crop and risks leading to crop loss are covered under the Scheme.

• Prevented Sowing/Planting Risk: Insured area is prevented from sowing planting due to deficit rainfall or adverse seasonal Conditions.
• Standing Crop (Sowing to Harvesting): Comprehensive risk insurance is provided to cover yield losses due to non- preventable risks, viz. Drought, Dry spells, Flood, Inundation, Pests and Diseases, Landslides, Natural Fire and Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane and Tornado.
• Post-Harvest Losses: coverage is available only up to a maximum period of two weeks from harvesting for those crops which are allowed to dry in cut and spread condition in the field after harvesting against specific perils of cyclone and cyclonic rains and nonseasonal rains.
• Localized Calamities: Loss or damage resulting from occurrence of identified localized risks of hailstorm, landslide, and Inundation affecting isolated farms in the notified area.

 

EXCLUSION OF THE RISK
The insurance cover will not be applicable in the damage of crops due to any of the following reasons.

• War & kindred perils
• Nuclear risks
• Riots
• Malicious damage
• Theft or act of enmity
• Grazed and/or destroyed by domestic and/or wild animals and other preventable risks shall be excluded.
  (Source of coverage- PMFBY, Gov. of India)

 

SUM INSURED/LIMITS OF COVERAGE
In case of Loanee farmers under Compulsory Component, the Sum Insured would be equal to Scale of Finance for that crop as fixed by District Level Technical Committee (DLTC) which may extend up to the value of the Threshold Yield of the insured crop at the option of insured farmer. The value of the threshold yield is lower than the Scale of Finance; higher amount shall be the Sum Insured.

Multiplying the National Threshold Yield with the Minimum Support Price (MSP) of the current year arrives at the value of sum insured. Wherever, Current year’s MSP is not available, so previous years MSP shall be adopted.

The crops for which MSP is not declared, farm gate price established by the marketing department board shall be adopted.

 

UNIT OF INSURANCE
The Scheme is implemented on an ‘Area Approach Basis‘ (i.e. Defined Areas) for each notified crop for widespread calamities. The Unit of Insurance can be demographically mapped with region having homogeneous Risk Profile for the notified crop.

 

IMPLEMENTING AGENCY

The ministry of Agriculture and farmers has full control on implementation of insurance companies. There is only one insurance company for the whole state. Selection of Implementing Agency may be made for up to three years however, the State government/ UT and the concerned insurance company are free to renegotiate the terms if relevant. This will facilitate the insurance company to establish the credibility among the farmers through investment out of the premium savings in various welfare activities for socio-economic development.

 

MANAGEMENT & MONITORING
The existing State Level Coordination Committee on Crop Insurance (SLCCCI), of the concerned State is responsible for monitoring of the schemes programmed in their state. However, a National Level Monitoring Committee (NLMC) under the chairmanship of Joint Secretary (Credit), Department of Agriculture cooperation and farmers welfare (DAC & FW) monitors the scheme at the national level.

Frequently Asked Question (FAQ)

PMFBY was launched on?

Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched on 13^th  January, 2016.

Which schemes were replaced by PMFBY?

PMFBY is a replacement scheme of National Agriculture Insurance Scheme (NAIS) and Modified National Agriculture Insurance Scheme (MNAIS).

What is the premium rate under PMFBY?
The farmers have to pay only 2% for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid will be only 5%.

Is PMFBY is compulsory to implement by all states?

No, It is not compulsory, one can implement or not, even state can opt out later too after implementation.

Which crops are covered under PMFBY?

• Food crops (Cereals, Millets and Pulses)
• Oilseeds
• Annual Commercial / Annual Horticultural crops.

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