Pradhan Mantri Fasal Bima Yojana (PMFBY)

  • It envisages a uniform premium of only 2 per cent to be paid by farmers for Kharif crops, and 1.5 per cent for Rabi crops. The premium for annual commercial and horticultural crops will be 5 per cent.
  • This insurance scheme, unlike the previous ones, covers local calamities too, such as landslide, hailstorm, inundation, etc. Inundation was not covered by the previous schemes.
  • It is to provide comprehensive insurance coverage against crop loss.
  • It is compulsory for farmers availing crop loans for notified crops in notified areas and voluntary for non-loanee farmers.
  • Premium rate – There is no capping in premium and one premium rate on pan-India basis. It is 1.5%, 2% and 5% for all Rabi, Kharif and annual horticultural/commercial crops, respectively.
  • There is no upper limit on the government subsidy i.e the difference between premium and insurance charges paid by the farmer.
  • Losses covered – Non-Preventable risk such as Natural Fire, Storm, Hailstorm, Cyclone and Inundation has also been included as a localized calamity. Post Harvest losses also covered.
  • A cluster approach will be adopted under which a group of districts with variable risk profile will be allotted to an insurance company
  • Use of Remote Sensing Technology, Smart phones & Drones for quick estimation of crop losses to ensure early settlement of claims.
  • In Budget 2017-18, the scheme was allocated Rs. 9000 Crore and the expenditure is being funded wholly from Krishi Kalyan Kosh.