Pradhan Mantri Fasal Bima Yojana - A way to secure Farm Income
Author: Vikram Yogi

The continued dependence on nature makes crop production vulnerable to numerous risks. In order to protect farmers against such risks, including crop failure due to natural calamities, pest and diseases and weather conditions, two major crop insurance schemes, namely National Crop Insurance Programme with its three component schemes: Modified National Agricultural Insurance Scheme(MNAIS); Weather Based Crop Insurance Scheme(WBCIS); and (iii)Coconut Palm Insurance Scheme, and National Agricultural Insurance Schemes(NAIS) are being implemented by the government. However, despite the best efforts of the centre and state governments, low coverage of agricultural insurance remained a continuing concern for the policy makers. Results of the NSSO's 70th round Survey also indicates that only a small segment of agricultural households insured their crops against possible crop loss during the crop period surveyed. This poor coverage was primarily on account of lack of awareness among the cultivators. For example, in case of pulses, 58 per cent of urad cultivators and 49 per cent of moong cultivators were not aware of and were not insuring their pulses crops during the Survey period.

Thus, The Union Cabinet, chaired by the Hon'ble Prime Minister, approved the 'Pradhan Mantri Fasal Bima Yojana' - a path breaking scheme for farmers' welfare on 13th January, 2016.

Key features of the Scheme are as follows:

a) For food and oilseeds crops, farmer's share of premium has been reduced to 1.5 per cent for rabi crops and 2.0 per cent for kharif crops. For annual commercial/horticultural crops, the premium has been kept at a maximum of 5 per cent.

b) Provision of capping of actuarial premium rates and reduction in sum insured has been removed.

c) Three indemnity levels - 70 per cent, 80 per cent and 90 per cent.


d) Inundation has been incorporated as a localized calamity for individual farm level assessment.

e) For more effective implementation- cluster approach will be adopted under which a group of districts with variable risk profile will be allotted to an insurance company for a longer duration say 3 years.

f) Use of Remote Sensing Technology and improved technology for planning and assessment of crop losses/yield estimation.

g) Better administration of crop insurance through Crop Insurance Portal by linking/coordination with major stakeholders including financial institutions insurance companies, etc.

h) Premiums rates under WBCIS have been rationalized to make it at par with the new scheme.

Way Forward-

a)-States/UTs should deploy additional manpower and provide adequate training to the personnel engaged in the Crop Cutting Experiments (CCE) to ensure accurate and timely availability of yield data for effective implementation of the insurance schemes.

b) Use of modern technology like Remote Sensing Technology (RST)/Satellite imageries to supplement the yield assessment through CCEs in the implementation of crop insurance schemes should be enhanced. c) To make weather based insurance system efficient and to cover the entire country, the present number of Automatic Weather Stations should be increased.


About Author / Additional Info:
I am currently pursuing Ph.D in Agricultural economics from IARI New Delhi.