The Pradhan Mantri Fasal Bima Yojna (PMFBY) was introduced on 14th January 2016, in a move aimed at reducing agricultural distress and farmer’s welfare without having to affect hefty hikes in the Minimum Support Prices (MSP) of agricultural products prices due to Monsoon fluctuations induced risks The PMFBY Scheme operates on the basis of ‘Area Approach’ i.e., Defined Areas for each notified crop for widespread calamities.
Key Features
- Providing financial support to farmers suffering crop loss/damage due to unforeseen events
- Stabilizing the income of farmers
- Encouraging farmers to adopt innovative and modern agricultural practices
- Ensuring flow of credit to the agriculture sector
- Three level of indemnity 70, 80 and 90
- Sum Insured equivalent to scale of finance
- Scheme envisages many new things such as utilizing innovative technologies like satellite imagery, vegetation indices etc. coupled with the mandatory usage of smart phones / hand held devices for increasing the speed and accuracy during yield estimation.
- Digitization of CCEs including geo-tagging, date-time stamping and photographs
- Single series data for production estimates and insurance
- Access to Insurance Company for co-observance of CCEs
- Written information to IC about CCE schedule by State Govt.
- Usage of RST, Drone and Mobile technology to aid CCEs and yield assessment
- Reduced Premium rate: As follows
Eligibility
All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage. However, farmers should have insurable interest for the notified/ insured crops. The non-loanee farmers are required to submit necessary documentary evidence of land records prevailing in the State (Records of Right (RoR), Land possession Certificate (LPC) etc.) and/ or applicable contract/ agreement details/ other documents notified/ permitted by concerned State Government (in case of sharecroppers/ tenant farmers).
Compulsory Component
All farmers availing Seasonal Agricultural Operations (SAO) loans from Financial Institutions (i.e. loanee farmers) for the notified crop(s) would be covered compulsorily.
Voluntary Component
The Scheme would be optional for the non-loanee farmers.
Coverage
Crop Coverage
The crops that are covered under the PMFBY scheme are mentioned as below.
1) Food crops (Cereals, Millets and Pulses)
2) Oilseeds
3) Annual Commercial / Annual Horticultural crops.
Risk Coverage under PMFBY scheme
a. Prevented Sowing/ Planting Risk: When the Insured area is prevented from sowing/ planting due to deficit rainfall or adverse seasonal conditions, claims up to 25% of sum insured are payable to the farmers.
b. Standing Crop (Sowing to Harvesting) : Comprehensive risk insurance is provided to cover yield losses due to non- preventable risks (Drought, Dry spells, Flood, Inundation, Pests and Diseases, Landslides, Natural Fire and Lightening, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane and Tornado).
c. Post-Harvest Losses: Coverage is available only up to a maximum period of two weeks from harvesting for those crops which are allowed to dry in cut and spread, small bundled condition in the field after harvesting against specific perils of cyclone and cyclonic rains and unseasonal rains.
d. Localized Calamities: Loss/ damage resulting from occurrence of identified localized risks of hailstorm, landslide, Cloud burst , natural fire due to lightening and Inundation affecting isolated farms in the notified area.
Risk Coverage under RWBCIS scheme
Under RWBCIS, extreme weather conditions (like excess/ deficit rainfall, high/ low temperature, continuous humidity, etc.) which may result in losses to the crops are covered.
How to Apply
Loanee farmers (Compulsory coverage)
Whenever banks sanction loan for a notified crop in a notified area, the crop loan amount only to the extent of Scale of Finance for notified crops and acreage of individual notified crops of loanee farmers shall be taken into consideration for compulsory coverage.
Loan disbursing bank branch/ PACS will finance the additional loan towards premium amount payable by farmer for crop insurance.
Non-loanee farmers (Optional coverage)
Farmers desirous of availing insurance shall fill up Proposal Form of the Scheme and submit the same to nearest bank branch or CSC centre (Click here for CSC Locator) or authorized channel partner of Shriram general insurance intermediaries. (SGI Branch Locator)
Non-Loanee farmer may submit insurance proposals personally / through ‘on-line portal’ of concerned insurance company or crop insurance portal designed by Government for the purpose. Click here
Insurance companies retain the right to accept or reject insurance proposal(s) in case proposal is incomplete, not accompanied by necessary documentary proof or insurance premium ordinarily.
How to claim
In Wide spread Calamity
- Crops damaged over wider area due to
- Draught, Dry Spell,
- Flood, Inundation,
- Pests & Diseases,
- Landslides,
- Natural Fire & Lightening,
- Storm, Hailstorm,
- Cyclone, Typhoon, Tempest, Hurricane & Tornado
- Threshold Yield -Actual Yield X Sum Insured Threshold Yield
- Payment of claim only after premium receipt
On account Claim Payment
- Crops damaged due to floods, prolonged dry spell & severe drought
- Likely damage is more than 50% of TY
- Joint loss assessment survey by State & Insurers with 15 days
- Only 25% of likely claims to be paid on-account
- Use of proxy indicators to aid loss assessment
- On-account claims to be adjusted against Final claims
- Threshold Yield -Actual Yield X Sum Insured X 25% Threshold Yield
- Payment of claim only after premium receipt
Prevented/Failed Sowing/Planting/Germination Claims
- Invoked if more than 75% crop sown area remained unsown/unplanted for notified Major crop
- 25% of Sum Insured to be paid as claim and policy terminates
- Use of proxy indicators to aid loss assessment
- Payment of claim only after premium receipt
Post Harvested Loss Claim
- Crops in cut and spread, small bundled condition for the purpose of sun drying in the field damaged due to
- Cyclonic Rains,
- Unseasonal Rain Fall,
- This cover is available across the country
- This could be localized event or wide spread event
- Event to be reported within 48 hours to Insurance Company by the Farmers, Banks, Block/Tehsil/District/State administration directly or through common call centre
- Loss assessment to be completed in 10 days
- Claims = Sum Insured X %age of estimated loss
- Payment of claim only after premium receipt
Localized Calamity Claim
- Crops damaged at individual farm level due to
- Hailstorm,
- Cloud Burst, Natural Fire due to lightening
- Landslide
- Inundation
- This cover is available across the country
- This could be localized event or wide spread event
- Event to be reported within 48 hours to Insurance Company by the Farmers, Banks, Block/Tehsil/District/State administration directly or through common call centre
- Loss assessment to be completed in 10 days
- Claims = Sum Insured X %age of estimated loss
- Payment of claim only after premium receipt
Important Conditions
- Complete premium should have been receipted before claim payment
- Loan sanctioning and premium remittance without raising crops doesn’t guarantee insurance acceptance
- Negligence/willful non-adherence by Banks lead to claim payment by the banks itself.
- Substantial misrepresentation by insured/banks , the concerned entity will only be responsible
