• To provide insurance Coverage and financial support to the farmers in the event of natural calamities, pests and diseases.
  • To stabilise the income of farmers to ensure their continuance in farming.
  • To encourage farmers to adopt innovative and modern agriculture practices.
  • To ensure flow of credit to the agriculture sector.

Intended Beneficiaries

  •  All farmers including sharecroppers and tenant farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.

Salient features

  • It is a Central sponsored scheme and it replaced all other existing insurance schemes except the restructured Weather-based crop Insurance Scheme.
  • A Uniform premium of only 2% to be paid by farmers for all kharif crops and 1.5% for all Rabi crops.
  • In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%.
  • The balance premium was to be paid by state and central government in equal proportions. However, recently, Centre has slashed its share of the premium subsidy from 50% to just 25% in irrigated areas and 30% for unirrigated areas from the Kharif season of 2020.
  • Districts having 50% or more irrigated area will be considered as irrigated area/district.
  • Central share in Premium  Subsidy has been increased to 90% for North-Eastern States from the existing sharing pattern of 50:50.
  • Central Subsidy under PMFBY to be limited for premium rates upto 30% unirrigated areas/crops and 25% for irrigated areas/crops.
  • It was compulsory for loanee farmers availing crop loans for notified crops in notified areas. However, now it has been made voluntary for all farmers, including those with existing crop loans.
  • Yields losses: due to non-preventable risks, such as National Fire and Lighting, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Risks due to Flood, Inundation and Landslide, Drought, Dry Spells, Pests/Diseases also will be covered.
  • Post-harvest losses are also covered which include losses from unseasonal and cyclonic rainfalls and hailstorms.
  • The scheme shall be implemented on an ‘Area Approach basis’. Defined Area (i.e., Unit area of insurance) is Village or above. It can be a Geo-Fenced/Geo-mapped region having homogenous Risk Profile for the notified crop.
  • Insured sum of crops: states/UTs can either choose scale of finance or district level value of notional average yield at MSP. Farm gate price will be considered for the other crops for which MSP is not declared.
  • Public sector insurer (Agriculture Insurance Company of India, United India Insurance Company etc.) and Private Insurance Companies are empanelled for implementation of the scheme. The farmers will be paid 12% interest by insurance companies for the delay in settlement claims beyond two months of prescribed cut-off date.
  • States have been allowed to set up their own provisions of ongoing schemes of PMFBY and RWBCIS as under:
  • Allocation of business to Insurance Companies to be done for 3 years. Currently, the tenders floated by the States are for 1/2/3 years periods.
  • Flexibility to States/UTs to implement the scheme with option to select any or many of additional risk covers/features.
  • States not to be allowed to implemented the scheme in subsequent Seasons in case of considerable delay buy States in release of requisite Premium Subsidy to concerned Insurance Companies beyond a Prescribed time limit. (Cut-off dates for Kharif and Rabi seasons will be 31st march and 30th September).
  • Recently, Maharashtra became the first state to irrigate its land records with the web portal of PMFBY, it will facilitate online access of land details to farmers, solve the issue of over-insurance and prevent insurance of ineligible people.

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