Governments Plans to Modify PMFBY; Make Crop Insurance Voluntary to all Farmers

Focusing on the development of the agricultural arena, Indian government decides to make some key changes to the Pradhan Mantri Fasal Bima Yojana (PMFBY) including crop insurance voluntary to all farmers, removal of high premium crops, giving flexibility to states to provide customized add on products, a senior government official said Monday. 

The agriculture ministry has also proposed setting up of State Level Corpus Fund, and migration of savings to a National-level Insurance Risk Pool to quell public perception that insurance companies are making profits from the scheme, the official said.  

Apart from that, it has suggested a premium ceiling for coverage under the scheme at 25 percent (to be revised every year) if the irrigated area within a crop is more than 50 percent. According to officials, the premium ceiling at 30 percent has been suggested if the irrigated area within a crop is less than 50 per cent. 

PMFBY, which was launched in April 2016, provides comprehensive crop insurance from pre-sowing to post-harvest period against non-preventable natural risks and calamity at an extremely low premium rate of 2 percent for Kharif crops, 1.5 percent for rabi crops and 5 percent for horticulture and commercial crops. It is also criticized vehemently by the public for not properly implemented within the grass-root level. 

PMFBY is in the seventh season of implementation. Many challenges and obstacles have been faced during the implementation of the scheme and the ministry has identified those gaps and proposed several changes and sought views of state governments on the same," the official told PTI.  
Among the key changes, the ministry has suggested making the scheme voluntary to all farmers including loaned farmers. This has been done because compulsory enrolment of loaned farmers was leading to dissent, the official said.