Agriculture remains the backbone of the Indian economy, providing sustenance to hardworking farmers and driving the growth and development of our nation. However, the agricultural sector is vulnerable to substantial risks stemming from unpredictable weather, pests, crop diseases, and other factors. These conditions severely impact the financial stability of farmers. To assist in overcoming these challenges, the Indian government introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY). Read ahead to learn about the PMFBY eligibility, documentation, and the registration process in detail.

Pradhan Mantri Fasal Bima Yojana (PMFBY) is a comprehensive crop insurance scheme that safeguards Indian farmers against a range of farming–related risks. It specifically covers from risks related to the pre–sowing and pre–harvest stages. Introduced on February 18, 2016, this government initiative is regulated by the MoA&FW or the Ministry of Agriculture and Farmers Welfare.

The primary objective of PMFBY is to provide financial assistance to farmers in the event of adverse weather conditions and natural calamities. The scheme is executed through the Agriculture Insurance Company of India (AIC) and a network of select banks and insurance companies, ensuring easy accessibility. Moreover, the registration, information access, and claim settlement processes are designed for simplicity and convenience.

Key Highlights of PMFBY

Some of the important aspects to know about PMFBY scheme are as under:

• Objective for growth of agriculture sector

  The objective of the scheme is to provide financial support in the event of loss or damage to their crops due to unforeseen events. With such protection, the initiative aims to stabilise the income of farmers to ensure continued operation. It also encourages the adoption of new and advanced techniques to improve crop yields and reduce the risk of crop loss. Another objective is ensuring the flow of credit to the agricultural sector to allow growth and competitiveness among farmers.

• Premium rates

  The rate of premium applicable on PMFBY differs based on the season and crops. All food grains and oilseed crops like cereals, millets, pulses, and so on grown in the kharif season will be charged a maximum premium rate of 2%. In the case of crops grown in the rabi season, the premium rate is 1.5%. For annual commercial or horticulture kharif and rabi crops, the premium rate is capped at 5%. The premium is calculated as a percentage of the sum insured or actuarial rate, whichever is less.

• Subsidy on premium

  All farmers are entitled to admissible subsidy on the premium. The subsidy is shared by the Central Government and the State/UT Governments on a 50:50 basis, and the rest is the premium payable by the farmer. In the case of North Eastern Regions (NER), the subsidy–sharing ratio between the Central and State Governments is 90:10. The exact subsidy is subject to variation based on the premium slab, explained as follows:

  • Upto 2% – No subsidy applicable
  • Higher than 2–5% – 25% subsidy applicable to a minimum 2% net premium paid by the farmer.
  • Higher than 5–8% – 40% subsidy applicable to a minimum 3.75% net premium paid by the farmer.
  • Higher than 8% – 50% subsidy applicable to a minimum 4.8% and maximum 6% net premium paid by the farmer.

• Simplified implementation

  The implementation of PMFBY is carried out through a multi–agency framework where insurance companies are selected under the guidance of combined forces. The agencies involved are the Ministry of Agriculture and Farmers Welfare, Department of Agriculture, Cooperation of Farmers Welfare, Government of India, and the concerned State in coordination with other relevant agencies. For effective implementation, the Implementing Agency (IA) will be selected via a cluster approach, which involves about 15–20 good and bad districts or areas bidding out.

• Sum Insured or Limit of Coverage

  The sum insured per hectare is equivalent to the measure known as the scale of finance (SOF). The District Level Technical Committee (DLTC) fixes and the State Level Coordination Committee on Crop Insurance (SLCCCI) notifies the applicable SOF. For individual farmers, the calculation of the sum insured depends on the scale of finance per hectare multiplied by the field area proposed to be insured. Such an area of cultivation is always expressed in ‘hectare’. The limit on coverage differs for irrigated and non–irrigated areas as they involve varying risks.

• Claim Settlement Process

  There are various methods used for the assessment of the crop condition before claim settlement. One major factor considered is the yield data based on the Crop Cutting Experiments (CCE). For good quality and reliable yield data, the image/video capture of the crop growth at various stages and transmission is analysed with the CCE on a real–time basis. All the other risks associated with crop loss are also assessed. Once the claim is processed and approved, the settlement takes place through the designated bank or insurance company.

Coverage in PMFBY Crop Insurance Scheme

The following risks leading to crop loss are covered under the PMFBY scheme:

• Yield losses

  Any loss to the yield of the crops due to non-preventable perils is covered under the PMFBY insurance schemes. The causes may include fire, lightning, flood, landslide, drought, pests, or diseases. The nature of the loss is assessed through standardised processes before claim approval.

• Prevented sowing

  If farmers have incurred expenditure for sowing/planting in a notified area but are unable to do so due to adverse weather conditions, they become eligible for indemnification under PMFBY. The maximum compensation is up to 25% of the sum insured.

• Post–harvest losses

  The crops kept in ‘cut & spread’ condition to dry in the field post–harvesting are covered under PMFBY against natural perils like cyclone, unseasonal rains, etc. The coverage is available for a maximum period of up to 14 days from the date of harvesting the crops.

• Losses due to localised calamities

  Losses identified in the notified area where the crop is being harvested are covered under PMFBY. Some examples include hailstorms, landslides, inundation, and so on that are expected subject to the conditions of the area.

  Note: Risks and losses besides the above-mentioned perils are excluded from the coverage. They include losses due to war, nuclear risks, riots, malicious damages, and destruction caused by domestic and wild animals.

PMFBY Eligibility Requirements

The Pradhan Mantri Fasal Bima Yojana eligibility criteria involve the following aspects:

• All farmers, including tenant farmers and sharecroppers growing notified crops in notified areas.
• Farmers must have an insurable interest for the insured crops.
• Farmers must have valid documents indicating the possession of land used for cultivation.
• Unlike the initial compulsory coverage clause where the scheme was compulsory for loanee farmers and optional for non-loanee farmers, the revamped guidelines make PMFBY optional for all farmers. Hence. Farmers availing a short–term Seasonal Agricultural Operations (SAO) loans and Kisan Credit Card (KCC) for notified crops qualify but it is an optional choice. The same goes for non–loanee farmers. If you qualify and want to opt–out, you can submit a declaration to the loan-sanctioning bank at least seven days before the cut–off date for enrolment in the scheme.
• Farmers enrolling for the scheme must not have received compensation for the same crop loss from any other medium.

PMFBY Documents Required for Registration

The Pradhan Mantri Fasal Bima Yojana Documentation process includes the following paperwork:

• Passport–sized photograph of the insured farmer.
• Identity proof – Aadhaar Card/PAN Card/Voter ID/Bank Passbook with Photo, Kisan Photo Book/NREGA Job Card.
• Address proof – Aadhaar Card/PAN Card/Voter ID/Electricity Bill/Bank Passbook with Photo.
• Evidence of land records as per the State Records of Right (RoR), Land Possession Certificate (LPC), and other applicable agreements, contracts notified or permitted by the state.
• Declaration about the crop sown/intended to be sown.

How to Register for PMFBY?

You can complete the PMFBY registration process online with the following steps:

1. Visit the PMFBY website and click on the option to register.
2. Fill in your personal details, residential address, bank account details, and other necessary information in the 'Register for New Farmer User’ form.
3. Once you have reviewed and submitted the information, your farmer account will be created on the PMFBY.
4. Next, you can fill in the crop insurance policy form. You can select a separate form as a loanee and non–loanee farmer. Enter the required information and attach the supporting documents wherever applicable.
5. Post filling and submitting the form for the crop insurance scheme registration, you will receive an acknowledgment receipt. You can track the application status using the receipt number.
6. Once your application is approved, you must pay the premium amount to obtain insurance under the PMFBY scheme.

The government of India elevates the protection of fields for farmers with an affordable and helpful crop insurance scheme. If you belong to a farming family and want to make use of advanced techniques to grow and enhance the agricultural landscape in India, you cannot do without adequate protection. Hence, Pradhan Mantri Fasal Bima Yojana (PMFBY) should form an important part of your investment to stay secure from adversities.