Pradhan Mantri Fasal Bima Yojana to Give More Flexibility to Farmers and States

Centre is all set to make some positive changes in its flagship crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY). After the revamp, states as well as farmers will get more freedom to select insurance products for risk hedging according to the proneness of that particular state to the specific weather vagary. At present, farmers across India do not have any option. There is just one single comprehensive insurance product that covers risks - from pre-sowing to post harvesting.

A senior agriculture ministry official said that “Every farmer who wants crop insurance will have to take this comprehensive product without any customization. This will lead to payment of a higher premium. So we want to break up this single product & give farmers several options in a bouquet of insurance products so that they can take their pick based on their requirement”.

The official also said that in the existing scheme, suppose a grower in Bihar does not want to take risk coverage for drought or a cultivator in Rajasthan wants to avoid from flood coverage then there is no provision.

The official further told that “We are planning to roll out separate products for pre sowing losses, post-harvest losses because of cyclonic rains & losses due to unseasonal rainfall. State government in consultation with farmers can decide on products they want to buy & the risk they want to cover”.

Pradhan Mantri Fasal Bima Yojana has replaced the existing 2 crop insurance schemes i.e. National Agricultural Insurance Scheme (NAIS) as well as the Modified NAIS. It offers comprehensive crop insurance right from pre-sowing to post-harvest period against non-preventable natural risks at very low premium rates a farmer has to give – 2 percent for kharif crops, 1.5 percent for rabi crops and 5 percent for horticulture & commercial crops. And the balance amount of premium is shared equally by Centre and respective state governments.

The penetration of crop insurance scheme has increased to 30 percent of gross cropped area in India from 23 percent in previous crop insurance schemes in 2015-16. Coverage of non-loanee cultivators, for whom the coverage is voluntary, has gone up from 5 percent in 2015-16 to 42 percent during Kharif 2019 that shows the acceptability as well as progress of the scheme on voluntary basis.

The official further told that “We are also considering making this insurance voluntary for loanee farmers also for whom this is compulsory now. We expect that after knowing the significance of this scheme, farmers will voluntarily participate in this scheme”.

Centre is also planning to involve compulsorily use of technology & mobile applications to check crop health & Crop Cutting Experiments (CCEs) in coordination with concerned states.