India is the land of farmers where the maximum proportion of rural population depends on agriculture. Hon’ble Prime Minister Shri Narendra Modi unveiled the new scheme Pradhan Mantri Fasal Bima Yojana (PMFBY) on 13th January, 2016
This scheme will help in decreasing the burden of premiums on farmers who take loans for their cultivation and will also safeguard them against the inclement weather.
It has also been decided to make the settlement process of the insurance claim, fast and easy so that the farmers do not face any trouble regarding the crop insurance plan. This scheme will be implemented in every state of India, in association with respective State Governments. The scheme will be administered under the Ministry of Agriculture and Farmers Welfare, Government of India.
- To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
- To stabiles the income of farmers to ensure their continuous process in farming.
- To encourage farmers to adopt innovative and modern agricultural practices.
- To ensure flow of credit to the agriculture sector.
Coverage of the farmers:
All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage. 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. moreover, applicable contract, agreement details, other documents notified permitted by concerned State Government.
- Compulsory Component All farmers availing Seasonal Agricultural Operations (SAO) loans from Financial Institutions (i.e. loanee farmers) for the notified crops would be covered compulsorily.
- Voluntary Component The Scheme would be optional for the non-loanee farmers.
- Special efforts shall be made to ensure maximum coverage of SC/ ST/ Women farmers under the scheme. Budget allocation and utilization under this should be in proportion of land holding of SC/ ST/ General along with Women in the respective state cluster. Panchayat Raj Institutions (PRIs) may be involved for the implementation and also obtaining framers feedbacks on these crop insurance schemes.
Coverage of the crops:
- Food crops (Cereals, Millets and Pulses)
- Annual Commercial / Annual Horticultural crops
Coverage of the Risk:
Following stages of the crop and risks leading to crop loss are covered under the Scheme.
- Prevented Sowing/ Planting Risk: Insured area is prevented from sowing planting due to deficit rainfall or adverse seasonal Conditions.
- Standing Crop (Sowing to Harvesting): Comprehensive risk insurance is provided to cover yield losses due to non- preventable risks, viz. Drought, Dry spells, Flood, Inundation, Pests and Diseases, Landslides, Natural Fire and Lightening, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane and Tornado.
- 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 condition in the field after harvesting against specific perils of cyclone and cyclonic rains and unseasonal rains.
- Localized Calamities: Loss/ damage resulting from occurrence of identified localized risks of hailstorm, landslide, and Inundation affecting isolated farms in the notified area
Exclusion of the Risk:
The insurance cover will not be applicable in the damage of crops due to any of the following reasons.
- War & kindred perils
- Nuclear risks
- Malicious damage
- Theft or act of enmity
- Grazed and/or destroyed by domestic and/or wild animals and other preventable risks shall be excluded.
Sum Insured/Limits of Coverage:
In case of Loanee farmers under Compulsory Component, the Sum Insured would be equal to Scale of Finance for that crop as fixed by District Level Technical Committee (DLTC) which may extend up to the value of the Threshold Yield of the insured crop at the option of insured farmer. The value of the threshold yield is lower than the Scale of Finance; higher amount shall be the Sum Insured.
Multiplying the National Threshold Yield with the Minimum Support Price (MSP) of the current year arrives at the value of sum insured. Wherever, Current year’s MSP is not available, so previous years MSP shall be adopted.
The crops for which, MSP is not declared, farm gate price established by the marketing department, board shall be adopted.
Highlight of the scheme
- There will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid will be only 5%.
- The premium rates to be paid by farmers are very low and balance premium will be paid by the Government to provide full insured amount to the farmers against crop loss in any natural calamities.
- There is no upper limit on Government subsidy. Even if balance premium is 90%, it will be borne by the Government.
- Earlier, there was a provision of capping the premium rate which is low claims being paid to farmers. Now this is removed and farmers will get claim against full sum insured without any reduction.
- The use of technology will be encouraged to a great extent. Smart phones, Remote sensing drone and GPS technologies will be used to capture and upload data of crop cutting to reduce the delays in the claim payment.
- The insurance plan will be handled under a single insurance company, Agriculture Insurance Company of India (AIC).
- PMFBY is a replacement scheme of National Agriculture Insurance Scheme (NAIS) and Modified National Agriculture Insurance Scheme (MNAIS) and hence exempted from the service tax.
The overall control on implementation of insurance companies will be under Ministry of Agriculture & Framers Welfare. The Ministry designated empanelled AIC and some private insurance companies presently to participate in the Government sponsored agriculture, crop insurance schemes.
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