The new Crop Insurance Scheme is in line with One Nation – One Scheme theme. It incorporates the best objectives of all previous schemes and at the same time, all previous shortcomings/weaknesses have been removed. The PMFBY will change the existing two schemes National Agricultural Insurance Scheme as well as the Modified NAIS.
- To give insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
- To normalize the income of farmers to ensure their continuance in farming.
- To promote farmers to adopt innovative and modern agricultural practices.
- To safeguard the flow of credit to the agriculture sector.
Highlights of the scheme
- There will be a proper premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In the case of annual commercial and horticultural crops, the premium to be given by farmers will be only 5%.
- There is no upper limit on Government subsidy.
- Before, there was a provision of capping the premium rate which resulted in low claims being paid to farmers.
- The utilization of technology will be encouraged to a great extent. Smartphones 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.
- PMF is a replacing scheme of NAIS / MNAIS, there will be an exemption from Service Tax liability of all the services involved in the implementation of the scheme. It is approved that the new scheme will ensure about 75-80 per cent of subsidy for the farmers in insurance premium.
Farmers to be covered
All farmers growing notified crops in a notified area during the season who have an insurable interest in the crop are eligible.
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 cover from time to time.
Voluntary coverage: Voluntary coverage may be obtained by all farmers not included above, including Crop KCC/Crop Loan Account holders whose credit limit is not renewed.
Risks covered under the scheme
Yield Losses (standing crops, on a notified area basis). Comprehensive risk insurance is provided to cover yield losses by the 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.
In cases where the majority of the insured farmers of a notified area, having the intent to sow/plant and incurred expenditure for the reason, are prevented from sowing/planting the insured crop due to adverse weather conditions, shall be eligible for indemnity claims up to a maximum of 25 per cent of the sum insured.
In post-harvest losses, line up will be available up to a maximum period of 14 days from harvesting for those crops which are kept in “cut & spread” condition to dry in the field.
For major localized problems, Loss/damage resulting from the occurrence of identified localized risks like hailstorm, landslide, and Inundation affecting isolated farms in the notified area would also be included.