Report on Pradhan Mantri Fasal Bima Yojana (PMFBY)


    In News 

    • Recently, the department of agriculture and farmers welfare furnished the figures in its report on Pradhan Mantri Fasal Bima Yojana to the Parliamentary Standing Committee on Agriculture’s report. 

    Major Findings 

    • For Farmers: Around 72.5 million farmers have benefited from the scheme between April 2016 and December 14, 2020. 
    • Private companies profit: Private enterprises have grown by more than 30 per cent in the last four years. Many businesses profit by 60 per cent to 70 per cent. 
    • Insurance companies fined: The scheme mandates that if the farmers do not get their claim within the specified time, the insurance companies must pay a penalty of 12 per cent interest.


    • The Parliamentary Standing Committee on Agriculture presented a report on Pradhan Mantri Fasal Bima Yojana and highlighted the major issues about the scheme. The Committee also made recommendations on this:
    • Issues Highlighted:
      • Delay in settlement of claims
      • Withdrawal of states from the PMFBY
      • Lack of coordination between the different stakeholders
      • The scheme has no provision for establishing a profit-sharing Corporate Social Responsibility (CSR) fund.
      • Lack of awareness among the farmers related to the scheme.
    • Recommendations made by the committee: 
      • It called for local public representatives such as members of Parliament and legislative assemblies to be nominated in District Level Grievance Redressal Committees (DGRCs). 
        • This would ensure the accountability of concerned stakeholders and enhance the acceptability of PMFBY amongst farmers
      • The ministry should also provide a toll-free number of three-four digits for queries regarding PMFBY, registration of complaints by farmers and information regarding action taken on their complaints.
    • It also urged the popularisation of the number and added that complaints were to be attended in a time-bound manner for effective implementation of PMFBY.
    • Spend profits on CSR: The companies should spend a set amount of money on rural development under Corporate Social Responsibility (CSR).
    • Andhra Pradesh, Telangana, Jharkhand, and Gujarat refused to participate in the plan for the 2020 Kharif season.
      •  The committee urged the Centre to find out their grievances.

    Pradhan Mantri Fasal Bima Yojana

    • It was launched on 13th January 2016, in line with the One Nation-One Scheme theme, covering over 5.5 crore farmer applications year on year.
    • This scheme replaced two schemes called National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS).
    • The Scheme shall be implemented on an ‘Area Approach basis’ i.e., Defined Areas
    • for each notified crop for widespread calamities. 


    • To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & diseases.
    • To stabilise the income of farmers to ensure their continuance in farming.
    • To encourage farmers to adopt innovative and modern agricultural practices.
    • To ensure the flow of credit to the agriculture sector.

    Implemented by: 

    • It shall be implemented through a multi-agency framework by selected insurance companies under the overall guidance & control of the Department of Agriculture and state government.

    Key Provisions:

    • There is no upper limit on Government subsidies. The premium rates to be paid by farmers are very low and the balance premium is paid by the Government to provide the full insured amount to the farmers.
    • The prescribed premium is 2% to be paid by farmers for all Kharif crops and 1.5% for all rabi crops.
    • In the case of annual commercial and horticultural crops, the premium is 5%.
    • Premium cost over and above the farmer share is equally subsidised by the States and the Center.
    • However, the Centre’s share is 90% of the premium subsidy for the Northeastern States to promote the uptake in the region.

    Beneficiary: All farmers growing notified crops in a notified area during the season who have an insurable interest in the crop are eligible.

    • The scheme is made voluntary for all farmers.


    • Claims worth Rs. 90,000 crore have so far been disbursed to farmers since the launch of the scheme.
    • The Aadhaar seeding has helped in speedy claim settlement directly into the farmer accounts.
    • Even during the Covid-19 lockdown period, nearly 70 lakh farmers benefitted and claims worth Rs. 8,741.30 crore were transferred

    Source: DTH