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PMFBY – Crop Insurance Scheme completes 5 years of operation

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Pradhan Mantri Fasal Bima Yojana completes 5 years of operationGovernment of India’s Crop Insurance Scheme – Pradhan Mantri Fasal Bima Yojana (PMFBY) has completed 5 years of its operation. It was launched by the Government on 13th January, 2016.

  • The Scheme is in line with One Nation – One Scheme theme.
  • It replaces 2 existing Crop Insurance schemes – National Agricultural Insurance Scheme & modified NAIS (National Agricultural Insurance Scheme).
  • The scheme was made voluntary for all farmers post revamp in February, 2020.
  • Under the scheme the premium rates are 2% for Kharif Crops, 1.5 % for Rabi Crops & 5% for commercial and horticultural crops.

i.The Scheme was introduced with an aim

  • To provide insurance coverage & financial support to farmers in event of failure of notified crops due to natural calamities, pests & diseases.
  • Encourage farmers to adopt innovative practices & ensure flow of credit to the agriculture sector.

ii.The Implementing Agencies are

  • Selected Private Insurance Companies under the guidance & control of Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW), Ministry of Agriculture & Farmers Welfare (MoA&FW) & concerned State agencies.

iii.The scheme is being implemented based on ‘Area Approach Basis’.

iv.The schemes covers all Crops for which past yield data is available and grown during the notified season.

v.The scheme covers the following risks

  • Yield Losses
  • Prevented Sowing
  • Post-Harvest Losses
  • Localised Calamities

Key Points:

i.Union Agriculture Ministry has stated that around INR 90, 000 Crore has been disbursed to farmers since the launch of the scheme.

  • The premium cost over and above the farmer share is equally subsidised by states & Central Government. However, the Central Government’s share is 90% of premium subsidy for North Eastern states to promote the scheme in the region.
  • Average sum insured per hectare has increased from INR 15, 100 before introduction of PMFBY to INR 40, 700 Post introduction of PMFBY.
  • Even during the Pandemic, around 70 Lakh farmers benefitted and claimed around INR 8, 741 Crore were transferred to the beneficiaries.
  • Farmers can report crop loss within 72 hours of occurrence of any event through Crop Insurance App, Common Service Centre (CSC) or nearest agriculture officer.

ii.Some Key features of the scheme are

  • Integration of Land records with PMFBY portal
  • ‘Crop Insurance’ mobile app for enrollment of farmers & usage of technology like satellite imagery, remote-sensing technology, drones, Artificial Intelligence & Machine Learning to assess crop losses.


Under PMFBY, the State Governments have to pay a huge amount to insurance companies as Premium.

  • The number of farmers being benefited compared to actual cover is also hugely disproportionate under the scheme.
  • So many state governments like Punjab, Jharkhand, Bihar, Gujarat, Telangana & West Bengal have launched their own Crop Insurance scheme.
  • In December, 2019 the Central Government had constituted a 7-member panel headed by Defence Minister Rajnath Singh to review the scheme and improve it according to the needs of the farmers.

Revamped version of PMFBY:

i.In February, 2020, Union Cabinet approved changes to PMFBY to address the challenges regarding its implementation.

ii.The Changes are

  • Allocation of business to Insurance Companies done for three years.
  • Central Subsidy under PMFBY to be limited for premium rates upto 30% for unirrigated areas/crops & 25% for irrigated areas/crops.
  • District having 50% or more irrigated area to be considered as irrigated area/district
  • Enrolment under the scheme to be made voluntary for all farmers.
  • Central Share in Premium Subsidy increased to 90% for North Eastern States from the existing sharing pattern of 50:50.

Recent Related News:

i.On December 31, 2020 Jharkhand has launched the state’s own crop relief scheme ‘Kisan Fasal Rahat Yojana’ to replace Government of India’s crop insurance scheme Pradhan Mantri Fasal Bima Yojana (PMFBY).

ii.On August 10, 2020, the Chief Minister of Gujarat, Vijay Rupani, launched Rs “Mukhya Mantri Kisan Sahay Yojana” to replace “Pradhan Mantri Fasal Bima Yojana (PMFBY)”, for FY20-21 only.

About Ministry of Agriculture & Farmers Welfare:
Union Minister – Narendra Singh Tomar
Minister of State – Parshottam Rupala, Kailash Choudhary