PM Fasal Bima Yojana: Crop Insurance Claims Worth Rs. 822.1 crore Pending Due to State Governments' Failure

PMFBY Update: Many farmers in various States who opted for the Pradhan Mantri Fasal Bima Yojana (PMFBY) have not received insurance claims since 2016-17. The unpaid amount of around 2,822.1 crore is due to state governments' failure to contribute their fair contribution to the scheme. 

Rs 2,822.1 Crore is Pending To be Paid By State Government 

According to the Ministry of Agriculture and Farmers Welfare, the concerned insurance companies are required to pay admissible claims under PMFBY within two months of the completion of Crop Cutting Experiments (CCEs)/harvesting period and 1 month of notification for invoking the risks/perils of prevented sowing, mid-season adversity, and post-harvest losses. However, this is contingent on the concerned government receiving the entire premium subsidies in a timely manner.

As per the statistics provided to the Lok Sabha by the Ministry in December, insurance companies have outstanding claims totaling Rs 3, 381.1 crore for the period 2016-17 to 2020-21. The State governments have not paid the subsidy; hence 2,822.1 crore is still waiting.

Rs 10,49,342 Crore Have Enrolled So Far 

The PMFBY was first used in the 2016 kharif season. It is a voluntary program for both states and farms. States can take part in the scheme based on their risk perceptions and financial constraints. Since its introduction, the PMFBY has been implemented in one or more seasons by 27 states and union territories.

From its commencement till 2020-21, the scheme has recruited a total of 2,938.7 lakh farmers, with a total sum insured of Rs 10,49,342 crore.

Bidding is used to determine the premium under the plan. Farmers must pay a maximum of 2% in kharif, 1.5 percent in rabi for food and oilseed crops, and 5% in commercial and horticulture crops. The remaining actuarial/bidded premium is split 50:50 between the union and the states (except the North Eastern States).

The premium rate for crops is determined by the risk associated with them, and the state's total responsibility is determined by the actuarial/bidded premium rate, crop sum insured, area insured, and number of crops notified by the states. In November last year, the Ministry told the Lok Sabha that "certain States have not released their share of premium subsidies for certain seasons, and any specific reasons for such default have not been communicated."

Some States Have Started Implementing Their Own Crop Insurance  

States have not provided a subsidy of 321. 51 crores for the 2018-19 season, 1,558.28 crore for the 2019-20 season, and 2, 863.79 crore for the 2020-21 season, according to data available with the Ministry (November 2021). 

Andhra Pradesh, Bihar, Gujarat, Jharkhand, and West Bengal are among the states that have begun to adopt their own crop insurance programs.

Timely Settlement of Claims Is Needed 

"Farmers must fight for an insurance pay out, and many do not receive it even after two seasons." States are engaged in populist politics, but they are not contributing to the PM Fasal scheme. "There is no use in joining in the scheme if a farmer does not receive the insurance claim on time," explains farmer Raghunath Dhepe. Farmers are losing interest in the scheme, he continued, due to pending claims.