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Pradhan Mantri Fasal Bima Yojana Research Team | Posted On Friday, January 18,2019, 03:21 PM

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Pradhan Mantri Fasal Bima Yojana



Agriculture is still the backbone of Indian economy. Crores of Indian families depend on agriculture for their living. All farmers are not capable of self financing crops, hence they avail loans from banks and private lenders to fund agricultural activities. If crops fail due to some reason, then the lives of farmers will be in jeopardy. Only crop insurance (if availed) can save farmers from financial crisis. Farmers find it expensive to pay premiums of the policy. Farmers have to pay around 15% of the insured amount of the crops towards premiums of the policy.

Pradhan Mantri Fasal Bima Yojana, PMFBY, is a subsidized crop insurance scheme, introduced in January 2016 by the Central Government of India. Under this scheme, Government provides subsidy to farmers on their crop insurance premiums, and hence farmers pay a very nominal amount towards premiums. PMFBY was introduced to encourage farmers avail crop insurance and thereby securing them financially, if their crops fail.

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SEE ALSO: What is Pradhan Mantri Suraksha Bima Yojana?

Pradhan Mantri Fasal Bima Yojana

Premium For Pradhan Mantri Fasal Bima Yojana

Under PMFBY, farmers pay a very nominal amount towards the premiums. Subsidy provided by the Central Government varies according to the crops. Below mentioned is the contribution to be made by farmers towards premiums under PMFBY:

  • 1.5% for Kharif crops like rice, cotton, ground nut and so on.
  • 2% for Rabi crops such as corn, rye, wheat.
  • 5% for Commercial and horticulture crops like coffee, tea, rubber, jute.

There is no upper cap on the subsidy provided by the Government. Equal contributions are made by Central and State Governments to provide subsidy for the insurance premiums.

Benefits Of The Pradhan Mantri Fasal Bima Yojana Risks Covered

  • Farmers will not have to worry about a financial crisis if their crops fail.

  • Farmers pay a very nominal amount towards premiums of the policy.

  • Coverage for various risks that may cause the crops to fail.

  • High sum insured

  • High settlement ratio

Risk Covered

  • Planting Risk: Farmers can claim up to 25% of the sum assured if the weather conditions don’t support sowing/planting of crops.

  • Standing Crops (sowing to harvesting): Farmers can claim sum assured when standing crops are damaged due to non- preventable risks.

  • Post-Harvest Losses: This is available for up to two weeks from the date of harvesting. Few crops are required to dry in ‘cut and spread’ in the field post harvesting. Coverage is provided for losses due to specific risks like cyclone and unseasonal rains.

  • Localized Risks: Damages resulting due to identified localized risks of hailstorm, landslide and inundation affecting isolated farms in the specified area.


  • Malicious damages: These are the damages made maliciously by a person or a group of people with an intention of causing losses and damages.
  • Preventable Risks: These are the risks that can be prevented by taking certain steps. Failure to prevent these risks is considered as carelessness on the part of the farmer.
  • Losses arising due to wars and nuclear disasters: Human initiated risks are not covered under crop insurance.

SEE ALSO: Pradhan Mantri Jan Dhan Yojana

Pradhan Mantri Fasal Bima Yojana Eligibility

  • There is no classification of farmers, and all of them are eligible for PMFBY facilities.

  • PMFBY scheme covers even those farmers who don’t have their own land.

  • Non-loanee farmers are also covered under the scheme. Non-loanee farmers are those farmers who have not availed any loans from banks or government.

Pradhan Mantri Fasal Bima Yojana Documents

  • Dully filled application form

  • Ownership documents of the farming land

  • Rental agreement of the farming land (this is for the farmers who don’t own a farmland and farms on a rented farmland)

  • Identity Proof

  • Address Proof

  • PAN

  • Plantation Information

  • Bank Details

SEE ALSO: Pradhan Mantri Mudra Yojana

How To Claim Insurance Under PMFBY?

The Government has mandated all insurers settle crop insurance claims, if they cannot verify the legitimacy of the claim within two months. If the claim settlement is delayed, then it hampers farmers start their agricultural activities for the next sowing season. Below mentioned are the steps to be followed to claim sum assured under PMFBY:

  • Fill the claim form and substantiate the reason for loss with acceptable proofs
  • Submit the application form to the insurer thereby notifying them on your claim
  • Insurer will appoint a loss assessor who would evaluate the loss and submit the report. Loss assessor will be appointed within 48 hours of notifying the insurer on the claim.
  • Loss assessor would evaluate the loss and submit a report to the insurer within 10 days of his appointment.
  • Insurer will settle your claim on the basis of the report submitted by the loss assessor.

Explain Pradhan Mantri Fasal Bima Yojana with example

Raju is a farmer in Mysore. He wants to grow rice in his farmland, but is worried about losses due to unseasonal rains. He finds crop insurance expensive. He hears about the PMFBY scheme. He applies for PMFBY scheme by furnishing required documents.

Raju pays just 1.5% of the insured amount towards policy premiums. The remaining amount is a subsidy offered by the Government. Due to unseasonal rains, Raju’s crops are damaged. Fortunately, Raju had availed crop insurance under PMFBY scheme. Raju files for insurance claim, his crop insurer appointed a loss assessor, who provides a report of the loss. The insurer settled his claim on the basis of the report submitted by the loss assessor. Raju did not suffer any financial loss, all thanks to the crop insurance availed.

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