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PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY) (Features of PMFBY (launched in…
PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY)
Features of PMFBY
launched in 2016 replacing the existing two schemes National Agricultural Insurance Scheme (NAIS) as well as Modified NAIS
A uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops & oilseeds and 5% for horticultural crops. The balance premium was to be paid by state and central government in equal proportions
no upper limit on Government subsidy
compulsory for loanee farmers availing crop loans for notified crops in notified areas
PMFBY operates on an area approach. Thus, all farmers in a particular area must pay the same premium and have the same claim payments
Yield Losses
includes mandatory use of technology such as smart phones, drones etc. while assessing losses
Public sector insurer (Agriculture Insurance Company of India, United India Insurance Company etc.) and private insurance companies are empaneled for implementation of the scheme
Challenges
Delayed compensation
High premium charged
Inadequate Data collection
Poor capacity to deliver
Declining farmer enrolments
Issues with notification of crops
As states have the responsibility to notify crops, there are lack of clarity and wide spread variations in choosing the major crops among the states, which in turn results in the exclusion from insurance coverage of farmers who grow non-notified crops
Way Forward
Governance
Strengthen the capacity of state governments by increasing funds for rural infrastructure
crucial to increase the penetration of crop insurance
grievance-redressal system to help distressed farmers resolve issues regarding the scheme
regulatory framework that unifies the insurance system covering yield and price risk
Technology and Infrastructure
use of remote-sensing, drones, satellite imagery and digitization of land records
360-degree approach where crop insurance scheme should be combined with efforts towards land and water management, including irrigation development, soil conservation and improvement in public delivery systems
Other recommendations
Land lease laws must be changed to achieve larger participation in the welfare programme
crucial to include women farmers, tenant farmers and sharecroppers