Pradhan Mantri Fasal Bima Yojana

  • It is to provide comprehensive insurance coverage against crop loss.
    • It is compulsory for farmers availing crop loans for notified crops in notified areas and voluntary for non- loanee farmers.
    • Premium rate – There is no capping in premium and one premium rate on pan-India basis. It is 1.5%, 2% and 5% for all Rabi, Kharif and annual horticultural/commercial crops, respectively.
    • There is no upper limit on the government subsidy i.e the difference between premium and insurance charges paid by the farmer.
    • Losses covered – Non-Preventable risk such as Natural Fire, Storm, Hailstorm, Cyclone and Inundation has also been included as a localized calamity. Post-Harvest losses also covered.
    • A cluster approach will be adopted under which a group of districts with variable risk profile will be allotted to an insurance company
    • Use of Remote Sensing Technology, Smart phones & Drones for quick estimation of crop losses to ensure early settlement of claims.
    • Concerns – The shortcomings in the design of the PMFBY include –
  • the involvement of banks in the mandatory insurance of the crops grown by borrower farmers
  • the assessment of damages on the basis of average crop loss in a given contiguous area rather than in the farmer‘s field
    • The banks usually adjust the compensation amount against the loans without the consent or knowledge of the farmers

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