Pradhan Mantri Fasal Bima Yojana (PMFBY): A Comprehensive Guide

The crop insurance scheme was launched on February 18, 2016,  under the leadership of Prime Minister Narendra Modi. It affects mainly small-scale agricultural producers in India. Most importantly, this proposed developmental agenda liberates smallholder farmers from expensive insurance costs and instead settles the entire claim upon crop failure. ABI Sustainable Business System 2.0 Section, 2010 offers such inclusion under Policy Statements and Procedures, Clause 17, ‘Deforestation’. 

Additionally, it is essential to mention the absence of information as regards the production cost of all crops supplied under the program in the countries serviced by insurance firms. Farmers ignore other issues that are related to the sum assured. For example, a billion dollars have been used to organize cabinet demonstrations related to this issue, yet the farmers also participate in their planning and implementation. 

This initiative is implemented in the context of the General Crop Estimation Survey by particular general insurance companies. Upon receiving the bid, the concerned state government was selected to implement the agency. Previously, all farmers who had crop loans or KCC for the specified crops had to be insured, the year 2020, this changed when some reforms were made to this plan.

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Aim of the Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana
  1. To ensure that there is a smooth credit flow to the agriculture sector
  2. Whenever there are crop losses due to natural disasters, pests, or diseases, crop insurance should be provided and farmers given financial aid.
  3. Income from farming is now steady, thus guaranteeing their existence in this agricultural field. Enhancing the adoption of better and more modern farming practices by farmers is encouraged.

DAC & FW has designated and joined the Agriculture Insurance Company of India (AIC) and several private insurance companies.

Currently, exclusively private insurance service providers are offering agricultural and crop insurance services that comply with the terms they and the state government/UT may choose to renew for subsequent periods of up to three years under financial capacity, infrastructure, human resources, and expertise, among other considerations.

Each concerned state government will, as is necessary, choose insurance agencies from among the accredited ones to implement the project in their respective states. such as coverage for farmers or regions, cash payout ratios, etc.

The choice of AI from these insurance companies depends on the minimum premiums from each crop area notified within that district cluster from a pre-qualified company.

  1. Reliance General Insurance Company Ltd.
  2. Cholamandalam MS General Insurance 2 Company Ltd.
  3. Bajaj Allianz General Insurance Company Ltd.
  4. Future Generali India Insurance Company Ltd.
  5. SBI General Insurance Company Ltd.
  6. Universal Sompo General Insurance Company Ltd. 
  7. Tata-AIG General Insurance Company Ltd.
  8. ICICI-Lombard General Insurance Company Ltd. 
  9. HDFC-ERGO General Insurance Company Ltd.
  10. IFFCO-Tokio General Insurance Company Ltd.

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The types of crops grown in a few places have been Emphasized: 

Farmers’ Insurance

A Land rent farmer or Some other person cultivating certain parts on an owner’s land can be insured against risks associated with these crops. To ensure the non-borrowers in this category, provide proof showing they have some right to this land for instance copies showing the agreement compiled during the land allocation process (RoR), receipt including parcels allocated, and leasing contract signed by two parties, should also have appropriate state rubber stamps.

  1. There is a potential for those farmers who do not benefit from the loans. Among those who are eligible, the program will make an honest effort to cover a high number of SCs, STs, and women farmers. 
  2. The budget allocation of the clusters should correspond to the extent of landownership by SCs, STs, and general and local women there is the possibility that the program may involve PRIs and they could be used as a tool for gathering views of farmers on the crop insurance scheme. 
  3. Every farmer receiving credit from a financial institution for seasonal farming must buy insurance for the specified crops.

Coverage of Farmers and Crops

The scheme has been made entirely voluntary as of the 2020 Kharif season such that cultivators of certain crops within a defined area and time of the year are deemed insurable would qualify. Oil seeds, Food crops, and annual commercial/horticultural crops.

Unit of the Insurance 

In the case of widespread catastrophes, the initiative will be effected on a piece-approach basis that defines areas for every crop notified. The intervention is an assertion of a theoretical uniformity among insured farmers within a unit of insurance facing similar prospected risks who roughly the same cost of production per hectare, earn similar income from crop farming per hectare, and undergo an equivalent magnitude of crop losses arising from the happening of an insured peril.

The Farming Unit might be ethnically identified in a region where the profile of crop risk is similar across the region. When it comes to localized hazards and post-harvest losses due to a named peril, the appraisal entity for loss would be an insured field affected by an individual farmer’s curriculum.

Implementation Agency of the Pradhan Mantri Fasal Bima Yojana

Ministry of Agriculture & Farmers Welfare will have the authority over how the implementation is done when it comes to insurance firms. Agricultural Insurance Corporation is one of these designated companies that have undertaken this task together with certain other selected private ones for purposes such as providing support under various government-sponsored farming risk management initiatives like CSC insurance or Pradhan Mantri Fasal Bima Yojana (PMFBY). At the same time meeting specific requirements regarding eligibility criteria as per rules set forth therein though depending upon what each country feels comfortable with, they may still choose preferred insurers from among themselves after all that has been done. so, far including state governments making decisions ending up having one insurer undertaking risks in each particular state.

Unique Mobile App and Website 

India’s government has started an insurance portal for better governance, coordination, proper information sharing, and farmer transparency. An android-based “Crop Insurance App” was also recently uploaded and freely available for download from the Crop Insurance Homepage under DAC and FW.

Eligibility for the Pradhan Mantri Fasal Bima Yojana 

All financial institutions (FIs) ought to have authorized Seasonal Agriculture Operations (SAO) loans, also known as crop loans, are loanee farmers, and non-loanee Farmers are offered another program choice. The whole region will be flagged under a government notice with a fixed equivalent sum assured per hectare when flying. To become a recipient of the specified lands, the farmer or tenant farmer should be in a position.

  1. For one to be recognized, he or she must produce a genuine and documented land ownership certificate before any landholder agreements be made
  2. All farmers were required to apply for insurance coverage within the stipulated timeframe. Additionally, farmers should not have been paid for the same loss from other avenues.
  3. Either a valid Kisan Credit Card (KCC) or one obtainable within six months of enrollment is necessary.

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 Benefits of (Pradhan Mantri Fasal Bima Yojana) Plans for Farm ers 

  1. An insurance policy can be completed to cover seasonal crops such as Kharif season crops and Rabi season ones.
  2. For contingency conditions, extra coverage is to be bought.
  3. Not beneficial for the loan purpose or the elective for the farmers. 
  4. If the farmer’s income is stable, then they will stick to farming.
  5.  Life insurance companies for farmers. 
  6. Rs. 2,00,000 per member for death cover.

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