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PMFBY to Cover Crop Loss: Min Rs. 1000 to be Paid Per Claim In Maharashtra

PMFBY is on its way to becoming the largest crop insurance program in the world. In comparison to the premium of Rs 25,186 crores paid during the previous six years, farmers have received Rs 1,25,662 crores to date. It aims to offer complete insurance coverage against crop loss due to unavoidable natural hazards under PMFBY, says the center.

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The Maharashtra government has mandated that a minimum of Rs. 1000/claim must be paid against any unique farmer ID
The Maharashtra government has mandated that a minimum of Rs. 1000/claim must be paid against any unique farmer ID

The Pradhan Mantri Fasal Bima Yojana (PMFBY), the third largest crop insurance program in the world, is expected to overtake other programs in the coming years as more than 5 crore farmer applications are submitted each year. Farmers have become more accepting of the program over the past six years, with the percentage of non-loanee, marginalized, and small farmers rising by 282% since the program's launch in 2016.


Farmers have paid a total of Rs 25,186 crores in premiums over the past six years, of which Rs 1,25,662 crores have been paid to farmers in response to their claims as of October 31, 2022. The majority of the premium is covered by the Central and State Governments under the scheme.

A factually erroneous news item was issued in some sections of the media claiming that a meager amount of insurance claims were being paid to the farmers in certain districts of Maharashtra, while the implementing States were pressing forward with enrolling farmers under Rabi 22-23.

The Ministry has made an effort to investigate the cases mentioned in the media, but due to a lack of precise information, only one farmer, Sh. Pandurang Bhaskar Rao Kadam has been named. According to media reports, despite paying a total premium of Rs. 595, he was compensated only Rs. 37.31 for one crop and Rs. 327 for another. However, according to real claim data, he has thus far earned a total of Rs. 2080.40, or over four times his premium. The Ministry emphasized once more that the sum of Rs. 2080.40 represents only partially paid claims and payments, not the whole amount owed.

Upon completion of the ultimate settlement of claims, Pandurang Rao can receive more funds. It is also noteworthy that certain farmers in the Parbhani District have gotten insurance claims totaling more than Rs. 50,000, and one farmer even collected Rs. 94,534 prior to the district's claims being finally settled.

6.66 million farmer applications were submitted in the Parbhani District, and farmers have already paid a premium of Rs. 48.11 crores in exchange for claims totaling Rs. 113 crore.

According to information provided by the Maharashtra government, out of 79.53 lakh applications received in Kharif-22, 283 had insurance amounts of less than Rs. 100, and 21,603 had insurance amounts of less than Rs. 1000. The requirement that a minimum of Rs. 1000/- would be given to an individual farmer if any claim occurs applies to farmers whose claim is smaller than Rs. 1000/- though they will be paid only at the time of final settlement. Some farmers submit multiple applications, and occasionally the overall claim is modest because the amount of their insured area is small. To solve this issue, the Maharashtra government has made it mandatory to pay claims for a minimum of Rs. 1000 against each distinct farmer ID.

However, farmers, particularly small farmers, are only required to pay a maximum of 2% for Kharif, 1.5% for Rabi food and oilseed crops, and 5% for commercial/horticultural crops. The program is being implemented on actuarial/bidded premium rates. The Central and State Governments split any premium that exceeds these caps 50:50, with the exception of the North Eastern Region, where the split will be 90:10 starting in the 2020 Kharif. The scheme is based on insurance principles; therefore, the size of the insured area, the severity of the damage, and the amount insured are crucial factors in determining the claim amount.

According to a top ministry official, technology and digitization play a big part in expanding PMFBY's operations and reach through precision agriculture. The combination of rural insurance and Agri-tech may be the secret to achieving financial inclusion and building trust in the program. Some of the key actions taken under the scheme to increase efficiency and transparency include the recently introduced Weather Information and Network Data Systems (WINDS), Yield Estimation System based on Technology (YES-Tech), and Collection of Real-Time Observations and Photographs of Crops (CROPIC). In Chhattisgarh, an integrated helpline system is undergoing beta testing to resolve farmer complaints in real-time.

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