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.