5 years of Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched from Kharif 2016 with aim to support production in agriculture by providing an affordable crop insurance product to ensure comprehensive risk cover for crops of farmers against all non-preventable natural risks from pre-sowing to post-harvest stage. The Scheme has completed 8 crop seasons and is being implemented across States/Union Territories (UTs). 

Objective of the Scheme

PMFBY aims at supporting sustainable production in agriculture sector by way of: 

  1. Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events. 
  2. Stabilizing the income of farmers to ensure their continuance in farming. 
  3. Encouraging farmers to adopt innovative and modern agricultural practices. 
  4. Ensuring credit worthiness of the farmers, crop diversification and enhancing growth and competitiveness of the agriculture sector besides protecting the farmers from production risks.

Implementing Agency (IA): 

  • The Scheme shall be implemented through a multi-agency framework by selected insurance companies under the overall guidance & control of the Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW), Ministry of Agriculture & Farmers Welfare (MoA&FW), Government of India (GOI) and the concerned State in co-ordination with various other agencies; viz Financial Institutions like Commercial Banks, Co-operative Banks, Regional Rural Banks and their regulatory bodies, Government Departments viz. Agriculture, Co-operation, Horticulture, Statistics, Revenue, Information/Science & Technology, Panchayati Raj etc.  

Management of the Scheme: 

  • The existing State Level Co-ordination Committee on Crop Insurance (SLCCCI), SubCommittee to SLCCCI, District Level Monitoring Committee (DLMC) already overseeing the implementation & monitoring of the ongoing crop insurance schemes like National Agricultural Insurance Scheme (NAIS), Weather Based Crop Insurance Scheme(WBCIS), Modified National Agricultural Insurance Scheme(MNAIS) and Coconut Palm Insurance Scheme(CPIS) shall be responsible for proper management of the Scheme. IA shall be an active member of SLCCCI and District Level Monitoring Committee (DLMC) of the scheme

Coverage of Farmers

  • All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage. 

Unit of Insurance: 

  • The Scheme shall be implemented on an ‘Area Approach basis’ i.e., Defined Areas for each notified crop for widespread calamities with the assumption that all the insured farmers, in a Unit of Insurance, to be defined as ‘Notified Area’ for a crop, face similar risk exposures, incur to a large extent, identical cost of production per 3 hectare, earn comparable farm income per hectare, and experience similar extent of crop loss due to the operation of an insured peril, in the notified area.

Coverage of Crops: 

  1. Food crops (Cereals, Millets and Pulses).
  2. Oilseeds.
  3. Annual Commercial / Annual Horticultural crops. 
  4. In addition, pilots for coverage can be taken for those perennial horticultural/commercial crops for which standard methodology for yield estimation is available.

Submission of UID (AADHAAR) by farmer: 

  • Aadhaar has been made mandatory for availing Crop insurance from Kharif 2017 season onwards. Therefore, all enrolment agencies are advised to mandatorily obtain Aadhaar Number of their farmers.

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: 
  1. 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. 


  1. Such other farmers whom the Government may decide to include from time to time. 

Voluntary Coverage: 

  • Voluntary coverage may be obtained by all farmers not covered above, including Crop KCC/Crop Loan Account holders whose credit limit is not renewed.  

Sharing of Risk: 

  • Risk will be shared by IA and the Government as follows: 
  • The liability of the Insurance companies in case of catastrophic losses computed at the National level for an agricultural crop season, shall be upto 350% of total premium collected (farmer share plus Govt. subsidy) or 35% of total Sum Insured (SI), of all the Insurance Companies combined, whichever is higher. The losses at the National level in a crop season beyond this ceiling shall be met by equal contribution (i.e. on 50:50 basis) from the Central Government and the concerned State Governments.  

Service Tax: 

  • PMFBY is a replacement scheme of NAIS / MNAIS, and hence exempted from Service Tax liability of all the services involved in the implementation of the scheme.

So far 29 crores farmers have insured their crops under the scheme and about 5.5 crore new farmers are getting registered every year. The government has disbursed claims worth Rs. 90,000 crore in the last five years.