About PMFBY: India’s facade of agricultural insurance

What is the News?

Since its launch in 2016, Pradhan Mantri Fasal Bima Yojana (PMFBY) has seen a consistent fall in acreage and the number of farmers covered.

What is Pradhan Mantri Fasal Bima Yojana(PMFBY)?

Click Here to read about it

Other Features of the Scheme:

This scheme was initially compulsory for loanee farmers but has been made voluntary for all since 2020. 

The scheme insures farmers against all non-preventable natural risks from pre-sowing to post-harvest. 

It is a yield index-based scheme and is mainly implemented on an area approach basis.

Claims are worked out on the basis of shortfall in actual yield vis-à-vis the threshold yield in the notified area. However, the premium is determined through bidding.

The premium is shared by the Union and state governments on a 50:50 basis and on a 90:10 basis in the case of northeastern states.

What are the issues with the PMFBY?

1) Low amount of Compensation, 2) States opting out of the scheme or delaying paying their share of premium, 3) Private insurers are not following the assessment by the government officials and rejecting many claims on the basis of their own assessment, 4) Corruption, 5) Disputes on the quality of yield data and 6) Human Resources Shortage.

What are the steps taken by the government to address issues with the PMFBY?

The government has made changes to the scheme twice. It has also set up a panel to suggest suitable working models for PMFBY. It is specifically studying Gujarat’s Beed Model of Crop Insurance.

Source: This post is based on the article “India’s facade of agricultural insurance” published in Down To Earth on 22nd February 2022.