All You Need to Know About the PMFBY Crop Insurance Scheme

 All You Need to Know About the PMFBY Crop Insurance Scheme

The Pradhan Mantri Fasal Bima Yojana, or as popularly referred to as PMFBY, was launched in 2016 that replace all the existing schemes that provided insurance for crops. National Agriculture Insurance Scheme (NAIS), Weather-based Crop Insurance scheme and Modified National Agricultural Insurance Scheme (MNAIS) are the schemes that were rolled back and all its benefits and shortcomings are tackled in the PMFBY.

This insurance scheme is in line with the objective of One Nation – One Scheme thereby helping unify the advantages and overcome the shortcomings of all the existing schemes. 

Objective of Pradhan Mantri Fasal Bima Yojana

The main objective of the PMFBY general insurance is to support sustainable production in the agricultural sector. This is achieved by the ensuring necessary financial assistance is available to the farmers that have suffered crop loss or damages due to other unforeseen events like natural perils. In addition to that, this scheme aims at stabilising the income of the farms to ensure continued activities along with encouraging these farmers to adopt to modern and innovative ways of farming. Also, other objectives include flow of credit to the agricultural sector which, in turn, contribute to the food security, crop diversification, enhancing growth and competitiveness of the sector. 

Premium rates and its subsidy under PMFBY

The actual premium charged under the PMFBY is arrived after deducting the subsidy by the state and central governments. The table below mentions the maximum premium that farmers have to pay:

SeasonCropsMaximum insurance charges to be paid by the farmer(% of sum insured)
KharifAll cereals, millets, pulses and oilseed crops i.e. all food grain and oilseeds.2% of the sum insured or actuarial rate, the lower of the two.
RabiAll cereals, millets, pulses and oilseed crops i.e. all food grain and oilseeds.1.5% of the sum insured or actuarial rate, the lower of the two.
Kharif and RabiAnnual commercial or Annual horticulture crops5% of the sum insured or actuarial rate, the lower of the two.

Eligibility of PMFBY 

The PMFBY weather based crop insurance policy is available for all farmers that grow crops which are notified in a particular area that is notified from the start during the season and have insurable interest are eligible to apply for this scheme. Further, this scheme is available on optional bases for all farmers from the Kharif season from 2020. 

Voluntary coverage is available for all farmers that are not classified in the above and include farmer with Crop KCC or Crop loan account holders whose credit limit isn’t renewed. 

Inclusions and Exclusions under PMFBY

The following types of risks are insured under this insurance policy for crops:

  • Yield losses: Any losses due to non-preventable risks like natural calamities resulting in a loss of yield is part of the PMFBY benefits.
  • Prevented Sowing: For farmers that are part of the notified area with an intention to sow/plant crop are prevented from sowing due to adverse weather condition are compensated a maximum of 25% of the sum insured.
  • Post-harvest losses: A coverage for a 14-day period is available for all those crops that are harvested and ready in “cut and spread” condition are a part of the policy inclusion.
  • Localised calamities: Any calamities affecting the local region thereby impacting the produce are covered by such PMFBY. 

* Standard T&C Apply

PMFBY excludes the situations of war, riots, nuclear risks, malicious damage, theft, act of enmity, or destroyed due to domestic or wild animal is excluded from the coverage of this crop insurance policy.

With the above explained information, you can ensure a comprehensive coverage for the crops using PMFBY. Further, keep in mind that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

David Curry

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