Pradhan Mantri Fasal Bima Yojna: Analysis

  • The sums insured under National Agriculture Insurance Scheme (NAIS), modified NAIS, and Weather Based Crop Insurance Scheme (WBCIS) were too low, as premiums were kept low and it was not based on any robust scientific system and had its own loopholes.
  • Introduction of ‘Pradhan Mantri Fasal Bima Yojana’ –was a path breaking scheme for farmers’ welfare.
Pradhan Mantri Fasal Bima Yojna (PMFBY)- a game changer
  • Raised the sums insured to realistic levels, basically to cover the cost of cultivation of farmers.
  • The premiums were heavily subsidised by the Centre and the states in equal proportions.
  • compared to kharif year2013, the number of farmers opting for the scheme increased by 210 per cent in kharif 2016, and the area covered increased by 126 per cent.
  • But the effectiveness of crop insurance scheme is based on how fast it can settle the claims of farmers. It is here that the governance of the state is tested.


Three critical steps in this process
  • The state has to notify the crops, make clusters of districts, determine the sums to be insured based on district level committees, and invite tenders from insurance companies;
  • The state and the Centre have to pay premium to the companies providing insurance; and
  • In case of crop damages, quickly assess the damages and ask companies to pay the claims of farmers


Challenges in the implementation
  • If states delay notifications, or payment of premiums, or crop cutting data, companies cannot pay compensation to the farmers in time.
  • Similarly, most states failed to provide smartphones to revenue staff to capture and upload data of crop cutting, which continues to come with enormous delay.
  • There is hardly any use of modern technology in assessing crop damages.


Way forward
  • There is an urgent need to link the insurance database with Core Banking Solution (CBS) so that when premium is deducted from a farmer’s bank account, the bank sends him a message informing about the premium, sum insured and name of insurance company.
Related Questions:
  • To what extent Pradhan Mantri Fasal Bima Yojana was able to address the farmers grievances? What are the challenges and issues involved in the implementation?



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