Governance
Five Years of Pradhan Mantri Fasal Bima Yojana
- 13 Jan 2021
- 5 min read
Why In News
Recently, the flagship crop insurance scheme of the Government of India - the Pradhan Mantri Fasal Bima Yojana (PMFBY) - has completed five years of its launch.
- PMFBY was launched on 13th January 2016.
- The scheme was conceived as a milestone initiative to provide a comprehensive risk solution at the lowest uniform premium across the country for farmers.
Key Points
- Pradhan Mantri Fasal Bima Yojana (PMFBY):
- It provides a comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers.
- Scope: All food & oilseed crops and annual commercial/horticultural crops for which past yield data is available.
- Premium: The prescribed premium is 2% to be paid by farmers for all Kharif crops and 1.5% for all rabi crops. In the case of annual commercial and horticultural crops, the premium is 5%.
- Premium cost over and above the farmer share was equally subsidized by States and GoI.
- However, GoI shared 90% of the premium subsidy for North Eastern States to promote the uptake in the region.
- The scheme was compulsory for loanee farmers availing Crop Loan/Kisan Credit Card (KCC) account for notified crops and voluntary for others.
- PMFBY 2.0:
- In order to ensure more efficient and effective implementation of the scheme, the central government had revamped PMFBY in the 2020 Kharif season.
- This overhauled PMFBY is often called PMFBY 2.0, it has the following features:
- Completely Voluntary: Enrolment 100% voluntary for all farmers from 2020 Kharif.
- Limit to Central Subsidy: The Cabinet has decided to cap the Centre’s premium subsidy under the scheme for premium rates up to 30% for unirrigated areas/crops and 25% for irrigated areas/crops.
- More Flexibility to States: The government has given the flexibility to states/UTs to implement PMFBY and given them the option to select any number of additional risk covers/features.
- Investing in ICE Activities: Insurance companies have to now spend 0.5% of the total premium collected on information, education and communication (IEC) activities.
- Use of Technology under PMFBY:
- Crop Insurance App:
- Provides for easy enrollment of farmers.
- Facilitate easier reporting of crop loss within 72 hours of occurrence of any event.
- Latest Technological Tools: To assess crop losses, satellite imagery, remote-sensing technology, drones, artificial intelligence and machine learning are used.
- PMFBY Portal: For integration of land records.
- Crop Insurance App:
- Performance of the Scheme:
- The Scheme covers over 5.5 crore farmer applications on average per year.
- Aadhar seeding (linking Aadhaar through Internet banking portals) has helped in speedy claim settlement directly into the farmer accounts.
- One notable example is mid-season adversity claims of nearly Rs. 30 crore in Rajasthan during Rabi 2019-20 Locust attack.
Way Forward
- Rationalising waivers and service delivery: Loan waiver schemes announced by state governments along with mandatory Aadhar linkage should be rationalised to enable PMFBY of greater coverage.
- Enable Timely Compensation: There has been reports of delayed compensation by some of the states.
- Bringing Behavioural Change: Apart from this, a lot more needs to be done in bringing about a behavioural change regarding the cost of insurance being a necessary input and not a money-back investment.
- Streamlining with Similar Schemes: PMFBY needs to be streamlined with state crop insurance schemes and schemes like Restructured Weather Based Crop Insurance Scheme to include more risk areas not covered under them.
- Proper Implementation: Successful implementation of PMFBY is an essential benchmark in agricultural reform in India to make farmers self-sufficient in times of crisis and support the creation of an Aatmanirbhar Kisan.
