Daily Hot Topic
Topic : Pradhan Mantri Fasal Bima Yojana (PMFBY)
GS-3 Mains : Economy
In News (FY24):
- General insurance companies reduced participation in PMFBY despite government efforts to expand coverage.
- Gross direct premium underwritten by insurers declined by 4.17% to ₹30,677 crore (from ₹32,011 crore in FY23).
- The decline is mainly due to a 32% fall in premium income by state-owned Agriculture Insurance Company (AIC) (₹9,890 crore in FY24 vs ₹14,619 crore in FY23).
- Four government-controlled insurers reduced their exposure in FY24 (AIC, New India Assurance, Oriental Insurance, SBI General).
About PMFBY (Launched in 2016):
- Provides affordable and comprehensive crop insurance to Indian farmers.
- Covers – Food crops, Oilseeds, Annual Commercial/Horticultural crops.
Key Features:
- Coverage & Benefits:
- Pre-sowing to post-harvest protection against natural calamities, pests, diseases.
- Covers individual farms for localized disasters (hailstorms, landslides, floods, wildfires).
- Post-harvest losses from cyclones, heavy rain, hail.
- Premium Rates: Heavily subsidized – 2% for Kharif crops, 1.5% for Rabi crops, 5% for commercial/horticultural crops.
- Participation: Voluntary for farmers (mandatory for loanee farmers).
- Sum Insured: Based on area sown, crop type, damage extent. No upper limit on government subsidy.
- Technology Integration: Uses smartphones, remote sensing, satellite imagery for faster claim assessment and settlement.
Benefits:
- Financial security for farmers in case of crop failure.
- Encourages risk-taking for adopting modern agricultural practices.
- Promotes inclusive growth by covering small and marginal farmers.
- Easier access to credit for the agriculture sector.
- Contributes to food security, crop diversification, and agricultural sector growth.
Challenges:
- Delayed claim settlements.
- Inadequate farmer awareness.
- High financial liabilities for States.
- Unreliable loss & yield assessment.
Way Forward:
- PMFBY is crucial for farmer security and agricultural sector stability.
- Needs better coordination between insurance companies, banks, and state governments for effective implementation.
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