Pradhan Mantri Fasal Bima Yojana Scheme | UPSC Notes on PMFBY

By K Balaji|Updated : June 22nd, 2022

PM Fasal Bima Yojana is the government's flagship agriculture insurance scheme in India, aligned with the One Nation-One Scheme ethos. Pradhan Mantri Fasal Bima Yojana was launched in 2016 after revamping earlier schemes-. Modified National Agricultural Insurance Scheme (MNAIS), Weather-based Crop Insurance scheme, and the National Agriculture Insurance Scheme (NAIS).

The PMFBY Launch Date was 13 January 2016 and the main aim of PMFBY is to provide a comprehensive risk solution by providing a uniform lower premium to all the farmers across the country. PM Fasal Bima Yojana UPSC Topic is important as it can be asked a current affairs question or under government policies.

Table of Content

What is the Pradhan Mantri Fasal Bima Yojana?

In keeping with the One Nation-One Scheme idea, the Pradhan Mantri Fasal Bima Yojana is the government's main scheme for crop insurance in India.

  • The programme covers annual commercial / annual horticultural crops, oilseeds, and food crops (cereals, millets, and pulses).
  • PMFBY is optional for farmers who have not taken out institutional credit, but it is mandatory for all farmers who have taken out institutional loans from banks. (This was changed after the Kharif season of 2020, and enrolment became voluntary.)
  • The Ministry of Agriculture is in charge of the programme.

PMFBY Scheme Details

Recently, to mark the 6th year of PM Fasal Bima Yojana, the government has launched Meri Policy Mere Hath which is a campaign to motivate all farmers to take the insurance. The campaign includes doorstep delivery of all related documents.

Pradhan Mantri Fasal Bima Yojana


PM Fasal Bima Yojana Premium

Kharif Crops - 2%

Rabi Crops - 1.5%

Annual commercial and horticultural crops- 5%

PM Fasal Bima Yojana Launch Date

13 January 2016


Mandatory for loanee farmers (Crop Loan/Kisan Credit Card)

Optional for others
PMFBY 2.0 - Voluntary for all


Revamped in 2020 Kharif Season

Risks Covered

Localized Risk coverage like a hail storms and landslide

Post Harvest Losses coverage - cyclonic and unseasonal rain

Prevented Sowing coverage-

The article below consists of a brief description of the PM Fasal Bima Yojana, citing its importance in the context of UPSC.

Objectives of Pradhan Mantri Fasal Bima Yojana

The Pradhan Mantri Fasal Bima Yojana (PMFBY) intends to support the agricultural sector's long-term yield generation. PMFBY will accomplish this by putting in place the following measures:

  • Farmers who have lost or damaged their crops due to unforeseen events will be given financial assistance.
  • Assuring that farmers' incomes are stable in order for them to continue farming.
  • Farmers are being encouraged to embrace and employ modern technology and agricultural practices in order to produce more efficiently and with higher yields.
  • Keeping credit flowing to the agriculture sector contributes to food security, crop diversity, and the agriculture sector's growth and competitiveness, as well as safeguarding farmers from production hazards.

Risks Covered under PMFBY Scheme

The following risks and events are covered under Pradhan Mantri Fasal Bima Yojana

  • Yield Losses (standing crops, on a notified area basis)
  • Yield losses due to non-preventable risks, such as Natural Fire and Storm, Lightning, Cyclone, Hailstorm, Tempest, Typhoon, Tornado, and, hurricanes.
  • Risks due to Flood, Inundation, and Landslide.
  • Drought, Dry spells, and Pests/ Diseases also will be covered
  • Prevention of Sowing: If the majority of insured farmers are unable to sow due to adverse weather conditions and have incurred costs for sowing.
  • Post-harvest losses
  • Localized issues are also covered.

Features of PMFBY

Following are the main features of the Pradhan Mantri Fasal Bima Yojana

  • Provision for full crop insurance coverage in the event of unavoidable crop loss. The goal is to keep farmers' income stable while also encouraging innovative farming practices.
  • Crop cycle insurance has been improved and expanded to cover losses that occur during pre-sowing and post-harvesting.
  • PMFBY adopts an Area Approach to resolve claims for widespread damage, in which an Insurance Unit is reduced to a Village or Panchayat level for significant crops.
  • By removing premium capping rules and other reductions on the total insured, PMFBY makes it easier for farmers to get their claims for the entire sum insured without any concessions.
  • In addition to landslides and hailstorms, inundation (flooding) has been included as a localized tragedy for individual farm assessments.
  • The PMFBY now provides assessments for post-harvest losses at the individual farm level. This includes losses caused by unseasonal and cyclonic rains across the country, which kill crops that had been allowed to dry for up to two weeks.
  • Claims up to 25% of the sum insured are now available for Prevented Sowing.
  • The insurance business will be assigned to a group of districts. This type of Cluster strategy will result in policy implementation that is effective. The allotment of insurance companies will be done through a bidding process for a period of up to three years.
  • Innovative technologies are being utilized to estimate crop losses more quickly and efficiently. Drones, smartphones, and remote sensing technologies will be used to ensure that insurance claims are settled quickly.
  • Crop insurance now has an online gateway to promote greater administration, transparency, and cooperation, as well as information dissemination.
  • The insurance proceeds are deposited straight into the farmer's bank account via electronic transfer.
  • In addition, from the Kharif 2016 season onwards, there’s another scheme - The unified Package Insurance Scheme (UPIS), that has been introduced for implementation, though on a pilot basis. This will be applicable to 45 districts across the country to cover other assets/activities. The activities covered will be machinery, life, accident, house, and student safety for farmers (under PMFBY/ Weather Based Crop Insurance Scheme – WBCIS).

Revamped PMFBY 2.0

The Union Cabinet has authorized a revision of the PMFBY and changes to its current provisions to address issues in the implementation of the crop insurance plan. This incredible project has now been running for five years.

As a result, the redesigned PMFBY 2.0 aims to assure timely computation and payment of claims to farmers proportionate to crop loss through a number of technological interventions, as well as the government's implementation of additional improvements to the scheme.

  • N-E States: The central government's portion of premium subsidies for north-eastern states will be enhanced from 50% to 90%.
  • Information, Communication, and Education (ICE) Activities - Insurance firms are required to spend 0.5 percent of total premiums received on ICE activities.
  • State adaptability: States and Union Territories will be able to set their own scale of financing for each district crop combination. States/UTs are also given the option of running the plan with a variety of risk covers.
  • Maximum Premium Subsidy for the Centre: The central subsidy for unirrigated areas/crops will be limited to premium rates of up to 30%. The central subsidy for irrigated areas/crops will be limited to premium rates of up to 25%.
  • Irrigated districts are defined as those with more than 50% of their land under irrigation.
  • States will be barred from running the scheme in subsequent seasons if they fail to release the required premium subsidy for insurance companies within a certain timeframe (March 31 for Kharif Season; September 30 for Rabi Season).
  • Crop Cutting Experiments (CCEs) will be conducted using technology solutions such as Smart Sampling Technique (SST).
  • Voluntary Enrolment: From the 2020 Kharif season, the PMFBY scheme is 100% optional for all farmers.

Technology under PM Fasal Bima Yojana

The use of technology under PMFBY is promoted by the Government

  • Crop Insurance App: The app allows the farmers to easily enroll in the PMFBY scheme and report the crop loss within 72hrs of the event.
  • To monitor and evaluate the loss of crops, drones, AI, satellite imagery, machine learning, and remote-sensing technology are used.
  • PMFBY Portal: For land records integration.

PM Fasal Bima Yojana UPSC

PM Fasal Bima Yojana is an important topic in the syllabus of current affairs and government policy. To learn more about PMFBY UPSC Topic, check the current affairs. You can also check the relevant UPSC Books like India Year Book to complete the topic.

Pradhan Mantri Fasal Bima Yojana is an important topic from the perspective of the UPSC Prelims and UPSC Mains. Aspirants who are going to appear for the UPSC Exam this year can get the UPSC Syllabus here. You can also practice the questions from the UPSC Previous Year’s Question Papers.

Download PM Fasal Bima Yojana Scheme Notes PDF for UPSC Exam

PM Fasal Bima Yojana UPSC Question

Question. What is the reason behind the revamping of the Pradhan Mantri Fasal Bima Yojana?

a.) To empower farmers to control risk in agriculture production by making them self-sufficient.

b.) To maintain the farm's income.

c.) To assist farmers in the North-Eastern United States in managing agricultural risks.

d.) All of the above

Correct Answer:- Option d

PMFBY Scheme in Northeast India

There are various causes of PMFBY's failure in Northeast India

  • Mizoram, Nagaland, Manipur, and Arunachal Pradesh are the only states in Northeast India that are not covered by the PMFBY Insurance scheme. This is owing to the insurance companies' disinterest in the northeastern states.
  • In addition, the state's failure to pay its insurance premium portion due to a lack of funds adds to the difficulties. Because of the high administrative costs in certain states, insurance firms are unwilling to bid on them. I
  • n the states, there is a lack of reliable land records and other historical yield data, particularly at the block and gramme panchayat levels.
  • Crop cutting studies that provide a fair, precise, and accurate yield estimation of the crops, which is required for horticulture crops, are challenging to conduct.

Except in Assam, the Northeast has a small number of loanee farmers, hence insurance coverage is minimal. Due to the lack of appropriate weather forecasting infrastructure in certain areas, insurance programmes reliant on the weather are impacted.

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FAQs on Pradhan Mantri Fasal Bima Yojana Scheme

  • Pradhan Mantri Fasal Bima Yojana is the government's flagship agriculture insurance scheme in India, aligned with the One Nation-One Scheme ethos.

  • To empower farmers to control risk in agriculture production by making them self-sufficient.

    • To maintain the farm's income.
    • To assist farmers in the North-Eastern United States in managing agricultural risks.
    • Allow for faster claim settlements by estimating yields quickly and accurately
  • Prime Minister Narendra Modi launched the Pradhan Mantri Fasal Bima Yojana on February 18, 2016

  • PMFBY is an insurance policy that provides risk cover for farming crops. It stabilizes the farmer's income to ensure his continuance in farming.

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