Pradhan Mantri Fasal Bima Yojana (PMFBY): PMFBY Crop Insurance Benefits, Eligibility, Coverage

Manish Kothari
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Manish Kothari

Pradhan Mantri Fasal Bima Yojna (PMFBY)

Pradhan Mantri Fasal Bima Yojna was launched by prime minister Narendra Modi on 18 February 2016. It offers insurance coverage to the farmers in case of crop damage/failures. This crop insurance was in line with the One Nation-One Scheme as it was launched by replacing the previously launched schemes like National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS). PMFBY is designed in a way that it comprises the best features of previous schemes while removing their drawbacks. The scheme aims to give early settlement of the sum assured and reducing the premium burden on farmers.

PMFBY provides comprehensive insurance cover for the failure of the crop which helps in reviving the income of the farmers. The scheme covers all annual commercial and horticultural crops along with all food and oilseed crops. This scheme is compulsory for farmers availing crop loan or KCC account for notified crops. While it is voluntary for others.

The Ministry of Agriculture has been administering the PMFBY.

Objectives of PMFBY:

  • The scheme aims to provide financial and insurance coverage to the farmers who notified any crop failure because of any natural calamities, pests, or disease.
  • The scheme will aim to stabilize the income of farmers to ensure that they continue to do farming.
  • The scheme will encourage farmers to adopt modern and innovative agricultural practices.
  • The scheme will ensure the flow of credit in the agricultural sector.

Highlights of PMFBY:

  • The premium to be paid by the farmers is only 2% for all Kharif crops and for all rabi crops, it is 1.5%. In the case of annual commercial or horticultural crops, only a 5% premium is to be paid by the farmers. The premium rates to be paid by farmers are very low and the rest will be borne by the government to provide the whole sum assured against crop loss on natural calamities.
  • There is no limit for the coverage. Even if the balance premium is high then also it will be borne by the government.
  • Previously, there was a capping on premium rates which resulted in lower claims to farmers. The objective behind this capping was to limit the Government outgo on subsidies for premiums. Now, this capping has been removed and the scheme will ensure full sum insured to farmers.
  • The scheme will encourage the use of the latest technology. To bring down the delay in claims to farmers, smartphones will be used to capture and upload data of crop cutting.
  • As NAIS and MNAIS have been replaced with the newly launched PMFBY, the exemption from the service tax liability will be given to all services which are involved in the implementation of the scheme. The new scheme is expected to offer subsidies of up to 75-80% of insurance premiums to farmers.

Coverage of PMFBY:

The farmers who are growing specific crops in a notified area in the crop season and also have insurable interests are eligible for PMFBY.

With a high demand among farmers, the scheme has now been made voluntary for all the farmers from Kharif 2020.

Earlier, the enrollment for the scheme was compulsory for the farmers of the below categories:

  • Farmers who grow crops in the notified area and have a crop loan or KCC account.
  • Such other farmers as per the decision of the government.

Voluntary Coverage: It can be obtained by all the farmers who are not covered under the above category. It also allows coverage to farmers who hold crop loans or KCC accounts whose credit limit is not renewed.

Coverage of crops:

  1. Oilseeds
  2. Food crop
  3. Annual Commercial or Annual Horticultural crops.

Coverage of Risks:

  1. Prevented snowing, planting, and Germination Risk: In this risk, the area which is insured is prevented from sowing, planting, and germination because of deficit rainfall or adverse seasonal or weather conditions.
  2. Standing crop: A comprehensive risk insurance is given to cover yield losses because of non-preventable risks which are drought, dry spell, fire due to natural causes, and many more.
  3. Post-harvest losses: In this, the coverage is only given for up to a maximum period of two weeks from harvesting for the crops which are dried, cut, and spread after harvesting.
  4. Localized calamities: The losses and damages of notified crops arising from occurrences of identified localized risk of hailstorm, landslide, cloudburst, inundation, and natural fire due to lightning.
  5. Add-on coverage for crop loss: The coverage is also given for crop loss because of the attack of wild animals wherever the risk is perceived to be sustainable and is identified.

Comparison of Pradhan Mantri Fasal Bima Yojana with other schemes

 Pradhan Mantri Fasal Bima YojanaNational Agricultural Insurance Scheme (NAIS) - 1999Modified National Agricultural Insurance Scheme (MNAIS) - 2010
Premium RateLow (Lower even than NAIS), Contribution will be done 5 times more by the governmentLowHigh (9% to 15%)
Insurance amount coverFullFullCapped
On account paymentYes NoYes
Localized risk coverageHail storm, Landslide, and inundationNoHail storm and Landslide
Prevented sowing coverageYesNoYes
Post-Harvest losses coverageAll India for cyclonic and unseasonal rainNoFor only cyclonic rain in coastal areas 
Use of technologyMandatoryNoIntended
AwarenessYes and has a target to double the coverage to 50%NoNo

How to apply for Pradhan Mantri Fasal Bima Yojana?

The crop insurance can be applied online by the farmers.

Click here to go to the official website from where the scheme can be applied or the calculation of the insurance premium can be done.


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