Home Current Affairs 2021-22

Pradhan Mantri Fasal Bima Yojana (PMFBY)

N.K. Chauhan in Gov. Schemes
Share this
Feb 06, 2021, Updated: May 21, 2022 · 3 min. read

Maharashtra is the latest state to threaten to withdraw from the Pradhan Mantri Fasal Bhima Yogna (PMFBY) if the changes suggested by it were not taken into consideration.

Maharashtra has proposed a share in premium collected from insurance companies during a non-payout or normal year.

Maharashtra also called for the Beed model, which was first experimented during kharif 2020.

Gujarat, Bihar, West Bengal, Andhra Pradesh, Telangana and Jharkhand have opted out of the scheme because of low claim ratio and financial constraints.

Pradhan Mantri Fasal Bima Yojana (PMFBY)

The Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched on 18 February 2016 by PM Modi in line with One Nation-One Scheme theme.

It replaced earlier two schemes National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS).

The scheme extends coverage for the entire cropping cycle from pre-sowing to post-harvest including coverage for losses arising out of prevented sowing and mid-season adversities.

The Scheme covers all Food & Oilseeds crops and Annual Commercial/Horticultural Crops for which past yield data is available and for which requisite number of Crop Cutting Experiments (CCEs) are being conducted under General Crop Estimation Survey (GCES).

Before, 2020 - the scheme was compulsory for loanee farmers availing Crop Loan/KCC account for notified crops and voluntary for others.

From 2020 kharif, the enrolment is made 100% voluntary for both loanee farmers and others.

Farmers pay a nominal 2% premium rate on the sum insured for all kharif crops, with these at 1.5% for rabi and 5% for annual and horticultural crops.

The balance premium, is paid as subsidy to the companies and shared between the Centre and the states on a 50:50 basis.

Voices are raised about the need to change the scheme, delay in claim settlement, failure to recognise localised weather events, and stringent conditions for claims were among the concerns.

Ministry: Ministry of Agriculture and Farmers Welfare.

PMFBY 2.0 (2020 kharif)

A provision has been incorporated wherein if states don't release their share before March 31 for the Kharif season and September 30 for rabi, they would not be allowed to participate in the scheme in subsequent seasons.

The revised guidelines, provide for allocation of business to insurance companies for a period of three years.

From 2020 kharif, the enrolment is made 100% voluntary for both loanee farmers and others.

Insurance companies have to now spend 0.5% of the total premium collected on information, education and communication (IEC) activities.

A cap is imposed on the Centre's premium subsidy under these schemes for premium rates up to 30% for unirrigated areas/crops and 25% for irrigated areas/crops.

Now states can select any number of additional risk covers/features to implement PMFBY - like prevented sowing, localised calamity, mid-season adversity, and post-harvest losses.

Beed Model of PMFBY

Maharashtra Chief Minister asked PM Modi for state-wide implementation of the Beed model of the crop insurance scheme Pradhan Mantri Fasal Bhima Yogna (PMFBY).

Beed is a district of Maharashtra located in the drought-prone Marathwada region, the model is also called 80-110 Formula.

Under this plan, the insurer's potential losses are restricted.

The insurance firm does not have to entertain claims above 110% of the gross premium.

The state government has to bear the cost of compensation above 110% of the premium collected to insulate the insurer from losses (bridge amount).

However, if the compensation is less than the premium collected, the insurance company would keep 20% of the amount as handling charges and reimburse the rest to the state government (premium surplus).

Last seen in news on: Apr 26, 2022
Read next

India State of Forest Report 2021 (UP Special)

Environment
May 25, 2022 · 2 min read

Highlights of "Economic Survey 2021-22"

Economy
May 25, 2022 · 10 min read

Highlights of Union Budget 2022-23

Economy
May 25, 2022 · 6 min read

Uttar Pradesh current affairs (June 2022 to April 2022)

Miscellaneous
May 30, 2022 · 10 min read

Uttar Pradesh current affairs (March 2022 to January 2022)

Miscellaneous
May 30, 2022 · 4 min read