< Previous | Contents | Next >
The Government of India launched a new agricultural insurance scheme in January 2016. The new scheme51 —Pradhan Mantri Fasal Bima Yojana (PMFBY)—has been termed as a path breaking scheme for farmers’ welfare. The highlights of this scheme are as given below:
• There will be a uniform premium of only 2 per cent to be paid by farmers for all kharif crops and 1.5 per cent for all rabi crops.
• In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5 per cent.
• The premium rates to be paid by farmers are very low and balance premium will be paid by the government to provide full insured amount to the farmers against crop loss on account of natural calamities.
• There is no upper limit on Government subsidy. Even if balance premium is 90 per cent, it will be borne by the Government.
• 25 per cent of the likely claim will be settled directly on farmers account and there will be one insurance company for the entire state as well as farm level assessment of loss for localised risks and post harvest loss.
• Earlier, there was a provision of capping the premium rate which resulted in low claims being paid to farmers. This capping was done to limit Government outgo on the premium subsidy. This capping has now been removed and farmers will get claim against full sum insured without any reduction.
• The use of technology will be encouraged to a great extent. Smartphones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments.
The PMFBY replaced the existing 52 NAIS (National Agricultural Insurance Scheme) of 1999 and Modified NAIS of 2010–11. The scheme is being implemented by the private sector as well as the public sector (AICIL) agriculture insurance companies. The scheme is estimated to cover 50 per cent of the cropped area by 2018-19 (which was 30 per cent by 2016-17), as per the Union Budget 2017-18 . Looking at the frequent droughts and floods, this scheme is seen as an important initiative from the government.