Pradhan Mantri Fasal Bima Yojana: Crop Insurance Premium Likely to Change in PMFBY 2.0

A senior official has informed that the crop insurance premium could be revised after the Union Cabinet approved the changes in existing PMFBY or Pradhan Mantri Fasal Bima Yojana. Under the new farm insurance scheme that is also called PMFBY 2.0, the Centre made important changes making it optional for farmers.

Launched by Prime Minister Narendra Modi in February 2016, it is compulsory for the loanee farmers to take insurance cover under the PMFBY. At present, 58% of the total farmers are loanees.

Malay Kumar Poddar, Chairman & Managing Director of Agriculture Insurance Company of India Ltd said, "We are waiting for the detailed guidelines. And yes, I think we will have to revisit our products & premium of crop insurance, taking into consideration the new developments".

But, the crop insurance company official did not reveal whether the premium will be increased or not, however experts said that it could head north for particular risk coverage.

An insurance company official on condition of anonymity told that "Now, with crop insurance being made optional for agriculture loanee as well as non-loanee, the number of cultivators under the coverage may come down that could lead to an increase of the underwriting cost".

Poddar said in the existing scheme, there are 5 riders in the crop insurance coverage but under the new scheme, a person can select the risk cover according to his needs.

He said that AICIL presently has a license for crop insurance in the country and it has asked for approval from the Insurance Regulatory & Development Authority of India to offer more products covering other verticals of agriculture & allied sectors.

The company told that it aims at providing ‘comprehensive’ insurance products for the rural population than restricting itself to crop insurance.

Poddar said he is expecting to get the regulator's nod very soon for "rural comprehensive insurance product, which will cover all areas related to agriculture, animal husbandry, aquaculture and farm equipment".