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Insuring Crop, Ensuring Financial Security: 5 Years of PM Fasal Bima Yojana

The Government of India under PM Modi took the historic decision to approve the Pradhan Mantri Fasal Bima Yojana on 13th of January, 2016. In its five years of operation, this scheme has changed the scenario of crop insurance in India with minimum premiums, comprehensive risk coverage and maximum returns for farmers.

PM Fasal Bima Yojana (PMFBY) covers more than 5.5 crore farmers year on year. By providing insurance to their crops, PMFBY has ensured financial security for India’s Annadatas.

Giving Maximum Claim for Indian Farmers

Farmers have to pay very nominal premiums to insure their crops under the PM Fasal Bima Yojana. Even as their premiums are very low, farmers received claims multiple times of what the premium. Data shows that for every ₹100 that farmers have paid as premium, farmers received ₹532 as claims. Till date, claims worth ₹90,000 crore have already been paid out to farmers under PMFBY.

Ensuring Maximum Coverage and Returns for Farmers

PMFBY has been structured in a farmer friendly manner such that in times of distress, PMFBY provides maximum relief to them.

This is why the average sum insured per hectare has increased from ₹15,100 during the pre-PMFBY Schemes to ₹40,700 under PMFBY. More than 87% claims on an average have been settled and amount paid to farmers.

During the critical period of pandemic itself, nearly 70 lakh farmers benefitted and claims worth ₹8,741.30 crores were transferred to the beneficiaries helping them tide over the period.

Excessive Rain or Shine, PMFBY is here to help

An end-to-end risk mitigation mechanism for farmers has been enabled under PMFBY by extending coverage for the entire cropping cycle from pre-sowing to post-harvest. This includes coverage for losses arising out of prevented sowing and mid-season adversities.

Individual farm level losses arising out of localized calamities and post-harvest losses are also covered due to perils such as inundation, cloudburst and natural fire.

Hailstorms in post-harvest losses and unseasonal and cyclonic rainfall have been covered to reduce risks for farmers

Some notable examples of these covers include prevented sowing claims over Rs 500 crore in Andhra Pradesh and Karnataka during the Kharif 2019 dry spell, localized calamity claims of over ₹100 crore in Haryana during Kharif 2018 hailstorm, mid-season adversity claims of nearly ₹30 crore in Rajasthan during Rabi 2019-20 locust attack, and claims to the tune of ₹5,000 crore in Maharashtra during the Kharif 2019 unseasonal rainfall.

Revamped PMFBY: Putting farmer first

Last year, PM Fasal Bima Yojana was revamped and restructured to further increase farm insurance coverage and give greater benefits to farmers. Provision of Penalties to be paid to farmers in case of delay of payment of their claims was introduced to ensure timely settlement of dues to farmers

Subscription to the scheme was also made voluntary after taking in farmer’s feedback. States have also been provided flexibility to rationalize the sum insured so that adequate benefit can be availed by farmers.

Technology Enabled For Quicker and Accurate Assessment of Crop Damage

National Crop Insurance Portal has been set up to seamlessly connect farmers, insurance companies, state governments and banks.

In this portal, more than 1.75 lakh bank branches and 44,000 Common Service Centers enter farmers’ data every season ensuring transparent and timely assessment of the yield, and quick settlements of claims to farmers. Aadhar seeding has helped in speedy claim settlement directly into the farmer accounts.

Technology such as satellite imagery, remote-sensing technology, drones, artificial intelligence and machine learning are being used to assess crop losses. PMFBY has also made it easier for the farmer to report crop loss within 72 hours of occurrence of any event through the Crop Insurance App, CSC Centre or the nearest agriculture officer.