Home   »   UPSC Calendar 2023   »   Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana (PMFBY)

Pradhan Mantri Fasal Bima Yojana 2022 UPSC

States Pulling Out: The centre said some states have pulled out of the flagship Pradhan Mantri Fasal Bima Yojana (PMFBY) Scheme for failure to pay their share of premium subsidy owing to financial constraints.

According to the kharif data of this year, around 19 states have opted for Pradhan Mantri Fasal Bima Yojana, as opposed to 22 states in Kharif 2018.

In Rabi so far, the number of states preferring the scheme has further dropped to 14, according to the data referenced on the PMFBY website.

Read about: Climate Change Performance Index

Compensation Model: The centre said some states have opted for a compensation model instead. Unlike PMFBY, it does not provide the same comprehensive risk cover to farmers.

Reduced Coverage: The number of farmers covered under PMFBY has also gone down, from 21.6 million in Kharif 2018 to 15.38 million this year.

Scheme Performance: Under PMFBY, in the last six years, Rs 25,186 crore have been paid by farmers as premium wherein Rs 1.25 trillion have been paid to the farmers against their claims, with Central and State Governments bearing most of the premium under the scheme.

The share of non-loanee, marginalized, and small farmers has risen by almost 282 per cent since the initiation of the scheme in 2016.

Read about: Free Foodgrains Scheme

About Pradhan Mantri Fasal Bima Yojana (PMFBY)

Pradhan Mantri Fasal Bima Yojana Launch

  • PMFBY was launched in February 2016 is an insurance service for farmers for their yields.
  • It was formulated in line with One Nation–One Scheme theme by replacing earlier two schemes National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS) by incorporating their best features and removing their inherent drawbacks (shortcomings).


  • To provide a comprehensive insurance cover against the failure of the crop thus helping in stabilizing the income of the farmers.

Implementing Agency

  • It shall be implemented through a multi-agency framework by selected insurance companies under the overall guidance & control of the Department of Agriculture, the Ministry of Agriculture & Farmers Welfare and state governments.

Pradhan Mantri Fasal Bima Yojana Objectives

  • To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
  • To stabilize the income of farmers to ensure their continuance in farming.
  • To encourage farmers to adopt innovative and modern agricultural practices.
  • To ensure flow of credit to the agriculture sector.

Key features of the PMFBY Scheme

  • Crops: All food & oilseed crops and annual commercial/horticultural crops for which past yield data is available.
  • Beneficiaries: All farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.
  • Risks: Following risks leading to crop loss are to be covered under the scheme.
    • Yield losses (due to risks such as flooding, drought, pest attacks, lightning etc.)
    • Prevented sowing (due to adverse weather conditions)
    • Post-harvest losses
    • Localized calamities (such as hailstorm, landslide, and Inundation etc.)
  • Exclusions: Risks arising out of perils such as war, nuclear risks, riots theft, enmity, grazed and/or destroyed by domestic and/or wild animals etc. are excluded.
  • 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 Government of India (GoI).
    • However, GoI shared 90% of the premium subsidy for North Eastern States to promote the uptake in the region.
  • Sharing of risk: Risk will be shared by Implementing Agency and the Government as follows:
    • The liability of the Insurance companies in case of catastrophic losses computed at the National level for an agricultural crop season, shall be up to 350% of total premium collected (farmer share plus Govt. subsidy) or 35% of total Sum Insured (SI), of all the Insurance Companies combined, whichever is higher.
    • The losses at the National level in a crop season beyond this ceiling shall be met by equal contribution (i.e. on 50:50 basis) from the Central Government and the concerned State Governments.
  • Use of Technology:
    • Crop Insurance App: Facilitates 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.

Revamped PMFBY 2.0

In February 2020, the centre has revamped PMFBY & is often called PMFBY 2.0, it has the following features:

  • Completely Voluntary: Enrolment is 100% voluntary for all farmers from 2020 Kharif.
    • Earlier, it was compulsory for loanee farmers availing Crop Loan/Kisan Credit Card (KCC) account for notified crops.
  • Limit to Central Subsidy: The Centre has decided to limit the PMFBY premium rates – against which it would bear 50% of the subsidy – to a maximum of 30% in un-irrigated and 25% in irrigated areas.
  • 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.


Sharing is caring!

Download your free content now!


We have received your details!

We'll share General Studies Study Material on your E-mail Id.

Download your free content now!

We have already received your details!

We'll share General Studies Study Material on your E-mail Id.

Incorrect details? Fill the form again here

General Studies PDF

Thank You, Your details have been submitted we will get back to you.

Leave a comment

Your email address will not be published.