Pradhan Mantri Fasal Bima Yojana – UPSC Prelims

Ministry/Department : Ministry of Agriculture & Farmers Welfare
Objective: To provide comprehensive insurance coverage against crop loss.
  • It was formulated in line with One Nation–One Scheme theme by replacing earlier two schemes National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS) by incorporating their best features and removing their inherent drawbacks (shortcomings).
  • The scheme covers kharif, rabi crops as well as annual commercial and horticultural crops
  • New scheme will cover post-harvest losses apart from yield loss.
  • It will also provide farm level assessment for localised calamities including hailstorms, unseasonal rains, landslides and inundation, pests and diseases.
  • The scheme proposes mandatory use of remote sensing, smart phones and drones for quick estimation of crop loss to speed up the claim process.
  • The settlement of claims will be fastened for the full sum assured. About 25% of the likely claim will be settled directly on farmers account. There will not be a cap on the premium and reduction of the sum insured.
  • It also provides insurance benefits to Landless labourers.
What is new in this scheme?
  • It is open to all farmers
  • It is now voluntary for all farmers. Earlier it was mandatory for farmers availing crop loans for notified crops in notified areas
  • There is no capping in premium and one premium rate on pan-India basis. It is 1.5%, 2% and 5% for all Rabi, Kharif and annual horticultural/ commercial crops, respectively.
  • The balance premium will be paid by the government to provide full insured amount to the farmers.
  • There is no upper cap on government subsidy, even if the balance premium is 90 percent, the government will bear it
  • It also covers the localized risks such as hailstorm, landslide, inundation etc. Earlier schemes did not cover inundation.
  • It provides post-harvest coverage. The NAIS did not cover while the modified NAIS covered only coastal regions.
  • A cluster approach will be adopted under which a group of districts with variable risk profie will be allotted to an insurance company.
  • Union Government has decided to cover damages to crops in wild animal attacks under Pradhan Mantri Fasal Bima Yojna in select districts on an experimental basis.
Factual Information:
  • Launched in 2016
  • It will replace the existing two crop insurance schemes National Agricultural Insurance Scheme (NAIS) and Modified NAIS

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