Why in News?
The Andhra Pradesh government has rejoined the Pradhan Mantri Fasal Bima Yojana (PMFBY) after opting out in the 2019-20 period. This return marks a significant shift as the state government renews its commitment to providing crop insurance coverage to its farmers.
What is Pradhan Mantri Fasal Bima Yojana (PMFBY)?
Launched in
2016 and managed by the
Ministry of Agriculture and Farmers Welfare, PMFBY is designed to offer farmers comprehensive crop insurance protection. The scheme replaced the earlier
National Agricultural Insurance Scheme (NAIS) and
Modified National Agricultural Insurance Scheme (MNAIS).
Eligibility:The scheme covers
farmers, sharecroppers, and
tenant farmers growing crops listed under the scheme in specified regions.
Objectives:- Insurance Coverage & Financial Support:
To protect farmers from crop failure due to natural disasters, pests, and diseases. - Income Stabilization:
To stabilize the incomes of farmers, ensuring they remain in agriculture despite unforeseen losses. - Promotion of Innovation:
Encourages farmers to adopt modern agricultural practices and technologies. - Credit Flow:
Ensures consistent flow of credit to the agricultural sector by offering financial backing in case of crop loss.
Premium Details:- Affordable Premium Rates:
- Kharif crops: 2%
- Rabi crops: 1.5%
- Commercial & Horticultural crops: 5%
- Government Subsidy:
Farmers pay a nominal premium, while the government covers the balance premium, ensuring farmers receive full insurance coverage. The government bears no upper limit for premium subsidies.- Old System vs. New: Previously, premium rates were capped to limit government expenditure, but this cap has been removed, allowing for full claim settlements.
Technology Integration:- Crop Insurance App:
Farmers can easily enroll and report crop damage within 72 hours of a disaster. - Advanced Tools for Loss Assessment:
Technologies like satellite imagery, remote sensing, drones, AI, and machine learning are employed to evaluate crop losses efficiently. - PMFBY Portal:
This portal integrates land records to streamline the process.
Recent Changes:- Optional Participation:
Initially mandatory for loanee farmers, participation in the scheme was made optional for all farmers from 2020. - Premium Subsidy Adjustments:
The Central Government capped its premium subsidy to 30% for unirrigated areas and 25% for irrigated areas (previously unlimited).
Issues with the Scheme:- Financial Constraints of States:
- State financial challenges and low claim payouts during normal years have deterred many states from implementing PMFBY.
- States also face difficulties in matching insurance payouts with premiums collected, leading to discrepancies in claims.
- Delays in releasing state-funded premiums also result in timely compensation issues for farmers, which undermines the core purpose of the scheme.
- Claim Settlement Problems:
- Many farmers report dissatisfaction with low compensation and delayed settlements.
- Insurance companies have been criticized for not investigating localized crop loss events, leading to denied claims.
- Implementation Challenges:
- Insurance companies have shown little interest in providing coverage for high-risk clusters, preferring areas with low failure rates.
- The nature of the insurance business favors the companies when crop failures are rare, leading to skewed incentives and farmer dissatisfaction.
Key Takeaways
To resolve these ongoing issues, a
comprehensive review of the PMFBY scheme is necessary. Both the
central and state governments should address the outstanding concerns to ensure farmers receive timely and adequate benefits.Additionally, instead of continuing to pay subsidies under the current scheme, state governments could explore
new insurance models that better serve the interests of farmers and address the limitations of the existing system.
Launch your Graphy