The crop insurance scheme is voluntary for all farmers. The government has mandated a compulsory use of at least 0.5 per cent of the gross premium collected by insurance companies for information, education and communication (IEC) activities.
In past eight years of its implementation, 56.80 crore farmer applications have been enrolled and over 23.22 crore farmer applicants received claims under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
The year has seen nearly Rs. 31,139 crores paid by farmers as their share of premium against which claims of over Rs. 1,55,977 crores have been paid to them. Thus, for every 100 rupees of premium paid by farmers, they have received about Rs. 500 as claims.
Pradhan Mantri Fasal Bima Yojana (PMFBY) is a demand driven scheme and is voluntary for the states as well as farmers. According to the Press Information Bureau (PIB), the number of farmer applications has grown 33.4 per cent and 41 per cent year-on-year during 2021-22 and 2022-23, respectively. Further, during the year 2023-24, there in an increase of 27 per cent in terms of farmers enrolled under the scheme so far, PIB says, adding that 42 per cent of the farmers insured under the scheme in FY 2023-24 are non-loanee farmers.
The third largest insurance scheme globally in terms of premium, the PM Fasal Bima Yojana launched in 2016, shields farmers from crop loss or damage arising out of unforeseen events. The PMFBY is successfully fulfilling the objectives of the scheme including providing financial support to stabilize income of farmers especially in natural calamity hit seasons/years/areas. PMBFY is a Central Sector Scheme, therefore, no State/UT-wise allocation and release is made under the scheme.
PIB says that the scheme is regularly reviewed in consultation with stakeholders, especially to address the challenges faced in its operational implementation.
The scheme voluntary for all farmers. The government has mandated a compulsory use of at least 0.5 per cent of the gross premium collected by insurance companies for information, education and communication (IEC) activities.
Increasing crop insurance coverage
Besides intensive use of technology, the scheme has seen a change in financial sharing pattern from 50:50 between central and state governments in NER to 90:10. Insurance companies have a contract of three years and states have the freedom to choose risk cover as per requirements.
The Department of Agriculture and Farmers Welfare is regularly monitoring the implementation of PMFBY including timely settlement of claims through weekly video conference of stakeholders, one to one meeting with insurance companies/states etc. Various innovative technologies are also adopted to increase the timeliness for flow of requisite information/data amongst stakeholders.
Coverage under the scheme has been increasing year-on-year and farmers are now subscribing to the scheme voluntarily because of subscription of bank loans. The government has taken various measures like an increase in tenure to three years for selection of insurance company through bidding process.
This is complemented with the infusion of improved technologies i.e. introduction of National Crop Insurance Portal (NCIP), Yield Estimation System based on Technology (YES-TECH), Weather Information Network and Data System (WINDS), Collection of Real time Observations and Photographs of Crops (CROPIC), integration of State Land Records with NCIP, Digiclaim module on NCIP to work out and settle the clams directly to farmers account using Public Finance Management System (PFMS). The government has periodically revised the Operational Guidelines of the PMFBY comprehensively to ensure that the eligible benefits under the scheme reach the farmers timely and transparently. This is based on the experience gained, views of various stakeholders and with a view to ensure better transparency, accountability, timely payment of claims to the farmers and to make the scheme more farmer friendly.
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