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.


  • 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.


  • 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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