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Pradhan Mantri Fasal Bima Yojna (PMFBY)

Pradhan Mantri Fasal Bima Yojana (PMFBY) is the government sponsored crop insurance scheme that integrates multiple stakeholders on a single platform

Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme was launched in India by Ministry of Agriculture & Farmers welfare, New Delhi from Kharif 2016 season onwards

Launched in 2016, the Pradhan Mantri Fasal Bima Yojana (PMFBY) is a large-scale crop subsidy insurance scheme that was aimed to safeguard farmers. This flagship scheme was designed in line with the One Nation–One Scheme and replaces three older initiatives—Modified National Agricultural Insurance Scheme (MNAIS), Weather-based Crop Insurance Scheme and the National Agricultural Insurance Scheme (NAIS)—by incorporating their best features and removing inherent shortcomings to improve insurance services available to farmers. This scheme is being administered by the Department of Agriculture, Cooperation and Farmers’ Welfare under the Ministry of Agriculture, along with empanelled general insurance companies.

The scheme provides coverage for the entire cropping cycle from pre-sowing to post-harvest and midseason adversities. It extends coverage against financial losses incurred by farmers due to unforeseeable events such as crop failure due to localised risk, post-harvest losses, natural calamities, unseasonal rainfall, crop diseases and pest infestations. The primary goal of the initiative is to reduce the burden of insurance premiums on farmers and ensure early settlement of claims.

OBJECTIVES The PM Fasal Bima Yojana operates under the ‘One Nation, One Crop, One Premium’ motto and aims to achieve the following goals:

  • Provide affordable comprehensive insurance cover against crop failure, damage, and loss.

  • Expand penetration of crop insurance with a primary focus on covering the total sown area.

  • Stabilise farmer incomes and ensure sustainability in agricultural production.

  • Ensure flow of credit to the agriculture sector.

  • Encourage farmers to adopt innovative and modern agricultural practices.

  • Stimulate competition in the agriculture sector.

  • Protect farmers from production risks.

  • Offer goods and services tax exemption to farmers.


Insurance Coverage under the PMFBY Scheme Under this scheme, the insurance cover is limited to specific crops and agricultural risks related to the crop yield. The list of notified crops includes food crops (i.e., cereals, millets, and pulses), oilseeds, annual commercial crops, and annual horticultural crops. It also covers all stages of the crop production cycle. The inclusions and exclusions of insurance cover provided are as follows:

  • Initial Stage – Risk of sowing, planting and germination failure Wherein, the insured area is prevented from successful sowing, planting, or germination due to low rainfall or adverse weather conditions

  • Growth Stage – Risk of standing crop failure In this scenario, planted crops are damaged due to non-preventable risks. Insurance cover is provided to cover yield losses against drought, dry spells, floods, inundation, pest infestations, crop diseases, landslides, natural fires, lightning, hailstorms, and cyclones.

  • Harvest Stage – Risk of post-harvest losses This is applicable to only those crops that are required to be dried in cut-and-spread or small bundles after harvesting. Insurance coverage is provided up to a maximum period of two weeks from harvesting these crops and extended for losses due to hailstorms, cyclones, cyclonic rains and unseasonal rains.

  • Protection against calamities – Loss or damage to notified insured crops due to identified localised risks of hailstorms, landslides, cloud bursts and natural fires is provided.

  • Exclusions – Loss or damage to notified insured crops due to war, nuclear risks, malicious damage and other preventable risks is excluded from the scope of coverage.

The insurance claim size is based on the proportion of shortfall from the threshold yield multiplied by the sum insured. The sum insured is calculated over the scale of finance provided to farmers and the threshold crop yield is calculated based on seven-year data and indemnity levels.

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