Crop Insurance and PMFBY

Farming in India is inherently risky. Unseasonal rain, drought, hailstorms, floods, and pest attacks can wipe out an entire season's crop in days, leaving farmers — especially small and marginal ones — with debt and no income. The Pradhan Mantri Fasal Bima Yojana (PMFBY), India's flagship crop insurance scheme, was launched in 2016 specifically to provide affordable, comprehensive protection to farmers across the country.

What Is PMFBY?

PMFBY is a government-subsidised crop insurance programme that covers yield losses due to natural risks. Key features:

• Implemented by empanelled private and public sector general insurers in partnership with state governments
• Premiums are heavily subsidised — farmers pay only 2% for Kharif crops, 1.5% for Rabi crops, and 5% for annual commercial and horticultural crops
• The remaining premium is shared equally between the central and state governments
• Covers a wide range of crops — cereals, pulses, oilseeds, and selected commercial crops

What Does Crop Insurance Cover?

Under PMFBY and allied schemes like RWBCIS, farmers are protected against:

• Prevented sowing/planting — if widespread calamity prevents farmers from sowing
• Standing crop losses — due to drought, flood, hailstorm, cyclone, fire, pests, and diseases
• Post-harvest losses — for up to 14 days after harvest, covering crops left in the field to dry
• Localised calamities — losses in individual plots due to hailstorm or landslide

Who Is Eligible?

All farmers — loanee and non-loanee — growing notified crops in notified areas are eligible. Loanee farmers (those who have taken crop loans from banks) are enrolled automatically unless they opt out. Non-loanee farmers must enrol voluntarily through a bank, Common Service Centre (CSC), or the PMFBY portal before the last enrolment date for each season.

How Is the Claim Paid?

Claims under PMFBY are primarily based on Crop Cutting Experiments (CCEs) conducted by state agriculture departments. If the average yield in a notified unit falls below the threshold yield, all insured farmers in that unit receive compensation proportional to the shortfall. For localised losses and post-harvest damage, individual assessments are done using remote sensing or field inspection.

RWBCIS — Weather-Based Cover

The Restructured Weather-Based Crop Insurance Scheme (RWBCIS) is an alternative to PMFBY that uses weather station data to trigger payouts based on rainfall deficiency, excess temperature, or similar parameters — without requiring crop cutting experiments. This speeds up claims significantly, often with payouts within 45 days of the trigger event.

Key Limitations

• Coverage is limited to notified crops and areas — not all crops or regions are covered in every state
• CCE-based assessment can be slow; delays in claim settlement have been a persistent challenge
• Post-harvest cover only extends to 14 days in the field after harvesting
• Losses due to war, nuclear risk, wilful neglect, or deliberate destruction are excluded

Conclusion

PMFBY remains one of the most important financial safety nets for Indian farmers, and understanding its provisions, enrolment deadlines, and claim processes can make a real difference during a difficult season. For farmers and agents working with agricultural communities, getting the details right is critical. TruePolicy provides clear, accessible information and connects you with advisors who can guide farmers through enrolment and claims with confidence.