Pradhan Mantri Fasal Bima Yojana

The Pradhan Mantri Fasal Bima Yojana has replace the existing two schemes National Agricultural Insurance Scheme (NAIS) as well as the Modified NAIS. 

• The scheme covers kharif, rabi as well as annual commercial and horticultural crops. 
• For Kharif crops, the premium charged would be up to 2% of the sum insured. 
• For Rabi crops, the premium would be up to 1.5% of the sum assured. 
• For annual commercial and horticultural crops, premium would be 5 per cent.

The remaining share of premium will be borne equally by the central and respective state governments.

• 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 resulted in low claims being paid to farmers. This capping was done to limit Government outgo on the premium subsidy. This capping has now been 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 will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments.
• PMFBY is a replacement scheme of  NAIS / MNAIS, there will be exemption from Service Tax liability of all the services involved in the implementation of the scheme. It is estimated that the new scheme will ensure about 75-80 per cent of subsidy for the farmers in insurance premium.

Coverage:-

All farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible for the scheme.

Compulsory coverage : The enrolment under the scheme, subject to possession of insurable interest on the cultivation of the notified crop in the notified area, shall be compulsory for following categories of farmers:

• Farmers in the notified area who possess a Crop Loan account/KCC account (called as Loanee Farmers) to whom credit limit is sanctioned/renewed for the notified crop during the crop season. and
• Such other farmers whom the Government may decide to include from time to time.

Voluntary coverage : Voluntary coverage may be obtained by all farmers not covered above, including Crop KCC/Crop Loan Account holders whose credit limit is not renewed.

• The Scheme provides post harvest coverage. 
• This scheme provides full coverage of insurance. It also covers the localized risks such as hailstorm, landslide, inundation etc. 
• Comprehensive risk insurance is provided to cover yield losses due to non-preventable risks, such as Natural Fire and Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado. Risks due to Flood, Inundation and Landslide, Drought, Dry spells, Pests/ Diseases also will be covered.
• Earlier schemes did not cover inundation. The NAIS did not cover this, while the modified NAIS covered only coastal regions.