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
