Pradhan Mantri Fasal Bima Yojana (PMFBY), Objectives and Challenges

Context: At least 4.14 lakh crop insurance claims submitted under the Pradhan Mantri Fasal Bima Yojana (PMFBY) were identified as bogus by the Maharashtra Agriculture Department.

Pradhan Mantri Fasal Bima Yojana (PMFBY)

PMFBY is a government-sponsored crop insurance scheme that integrates multiple stakeholders on a single platform. The Pradhan Mantri Fasal Bima Yojana (PMFBY) was introduced by the Union government. The main cause of this is that developments like the frequent occurrence of rainfall shortfalls, the tardy onset of monsoon, and dry spells have highlighted the value of crop insurance for farmers.

The Pradhan Mantri Fasal Bima Yojana seeks to increase agricultural output. This is done by assisting to ensure comprehensive risk coverage for farmers’ crops against all naturally occurring dangers that cannot be avoided that occur from the pre-sowing phase through the post-harvest phase.

The Pradhan Mantri Fasal Bima Yojana was introduced in 2016, and since then, farmers have benefited from it in significant numbers. The federal government, however, has modified the plan and given the go-ahead for its redesign. This is to ensure that the plan is implemented in a way that is both more efficient and effective.

Objectives of PMFBY

It aims to support sustainable production in agriculture sector by:

• Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events.
• Stabilizing the income of farmers to ensure their continuance in farming.
• Encouraging farmers to adopt innovative and modern agricultural practices.

Pradhan Mantri Fasal Bima Yojana 2.0

To resolve problems with the implementation of the crop insurance plan, the Union Cabinet has approved a reform of the PM Fasal Bima Yojana and revisions to its current rules. It has been five years since this amazing endeavour began.

The revamped PM Fasal Bima Yojana 2.0 thereby seeks to ensure timely computation and payment of claims to farmers proportionate to crop loss through several technological interventions, as well as the government’s deployment of further improvements to the programme.

• N-E States: The central government will increase its contribution to premium subsidies for the northeastern states from 50% to 90%.
• Information, communication, and education (ICE) initiatives must account for 0.5 per cent of all premiums collected by insurance companies.
• State adaptability: States and Union Territories will have the option to determine the level of finance for each district crop combination that best suits their needs. Additionally, States/UTs have the option to run the plan with a range of risk covers.
• Maximum Premium Subsidy for the Centre: The maximum premium rates that the centre will pay for non-irrigated lands and crops are 30%. The federal subsidy will only be available at premium rates of up to 25% for irrigated areas/crops.
• Voluntary Enrollment: Beginning with the 2020 Kharif season, all farmers may choose to participate in the PM Fasal Bima Yojana programme.
• States will be prohibited from operating the programme in subsequent seasons if they fail to release the necessary premium subsidy for insurance companies within a specific timeframe (March 31 for Kharif Season; September 30 for Rabi Season).
• Irrigated districts are defined as those with more than 50% of their land under irrigation.
• Using technological advancements like the Smart Sampling Technique (SST), crop-cutting experiments (CCEs) will be carried out.

Technology under Pradhan Mantri Fasal Bima Yojana

To increase its reach and efficacy, the PM Fasal Bima Yojana has undergone a number of modifications over time. The use of technology to simplify the scheme’s execution and enhance its results has been one of the main areas of concentration. Supplying this technology, also advances the notion of a Digital India:

• Crop Insurance App: Using this app, farmers may quickly sign up for the PM Fasal Bima Yojana and report crop losses within 72 hours of occurring.
• Drones, artificial intelligence, satellite imaging, machine learning, and remote sensing technology are utilised to track and assess crop loss.
• PM Fasal Bima Yojana Portal for integrating land records.

Pradhan Mantri Fasal Bima Yojana Challenges Associated

Although the plan has changed, there are still some difficulties. The creation of awareness is one of the primary obstacles to the scheme’s efficient execution.  In addition to these adjustments, there are yet more that need to be made to influence behaviour. These adjustments are due to the cost of insurance being a necessary output rather than a money-back investment.

Risks Covered & Exclusions

• Basic Cover: Risk of sowing, planting and germination failure, Risk of standing crop failure, Risk of post-harvest losses, and Protection against calamities.
• Exclusions: Loss or damage to notified insured crops due to war, nuclear risks, malicious damage and other preventable risks is excluded from the scope of coverage.

Importance of Pradhan Mantri Fasal Bima Yojana

If there is an inevitable crop loss, PMFBY contains a provision for full crop insurance coverage. The objective is to support creative farming methods while maintaining farmers’ economic stability. The pre-sowing and post-harvesting phases of crop cycle insurance have been enhanced and expanded to include these losses.

To handle claims for broad damage, the PM Fasal Bima Yojana utilises an area approach, in which an insurance unit is downsized to the level of a village or panchayat for important crops in India. Farmers now have an easier time obtaining their claims for the full sum insured without any concessions because PMFBY removes premium capping regulations and other reductions on the total insured.

Flooding has been added as a localised tragedy for individual farm assessments along with landslides and hailstorms. At the agricultural level, the PM Fasal Bima Yojana now offers assessments for post-harvest losses. This includes crop losses brought on by cyclones and rain that occurs out of season in India and destroys crops that had been allowed to dry for up to two weeks. Direct electronic transfer of the insurance proceeds into the farmer’s bank account.

Another programme, the Universal Package Insurance Scheme (UPIS), has also been introduced for implementation, albeit on an experimental basis, starting with the Kharif 2016 season. In order to cover additional assets and operations, this will be applicable to 45 districts nationwide. Machinery, life, accident, home, and student safety for farmers would be covered (as part of PM Fasal Bima Yojana/Weather Based Crop Insurance Scheme, or WBCIS).

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