The Pradhan Mantri Fasal Bima Yojana (PMFBY), the flagship crop insurance scheme launched by the Government of India in 2016, has completed nine years of operation. Over this period, the scheme has disbursed claims amounting to Rs 1.75 lakh crore to more than 23.22 crore farmers, playing a pivotal role in ensuring financial security for the agricultural community against losses caused by unpredictable natural disasters. The Ministry of Agriculture & Farmers Welfare highlighted these achievements, reinforcing the scheme’s impact on stabilizing farm incomes and promoting the adoption of modern agricultural practices across the country.
Introduced by Prime Minister Narendra Modi, PMFBY was designed to provide comprehensive risk coverage to farmers against yield losses due to natural calamities, pests, and diseases. Since its inception, the scheme has seen significant evolution and expansion, ensuring timely compensation to farmers facing distress due to climate-related uncertainties. Over the years, the scheme has emerged as the world’s largest crop insurance initiative, covering 23 states and Union Territories. In the financial year 2023-24 alone, farmer enrolment grew by an impressive 25% compared to the previous year, indicating the rising trust in the scheme’s effectiveness and accessibility.
Recognizing the scheme’s critical role in agricultural resilience, the Union Cabinet has approved its continuation along with the Restructured Weather Based Crop Insurance Scheme (RWBCIS) until 2025-26, with an allocated budget of Rs 69,515.71 crore. The RWBCIS, introduced as a complementary scheme alongside PMFBY, follows a weather index-based insurance model to address climatic risks affecting crop yields. The combined implementation of both schemes ensures an extensive safety net for India’s farming community, minimizing financial risks and enhancing stability in the agricultural sector.
One of the key drivers behind the success of PMFBY has been the integration of advanced technology to ensure transparency and accuracy in claim settlements. The scheme employs satellite imagery, drones, and remote sensing tools to streamline crop area estimation, resolve yield disputes, and assess losses with greater precision. In a major technological advancement, the introduction of YES-TECH (Yield Estimation System Based on Technology) from the Kharif 2023 season has further strengthened the scheme’s effectiveness. By blending technology-driven and manual estimates, YES-TECH facilitates accurate yield loss assessments, reducing discrepancies and expediting claim settlements. This digital transformation has improved efficiency in identifying affected farmers and ensuring that compensation reaches them within the stipulated time frame.
Under the PMFBY framework, farmers are required to pay a nominal premium rate—2% for Kharif crops, 1.5% for Rabi crops, and 5% for horticultural or commercial crops—while the remaining premium amount is borne by the government through subsidies. This cost-sharing model makes the scheme affordable and accessible to farmers, especially small and marginal cultivators. The insurance coverage extends to a wide range of risks, including droughts, floods, hailstorms, landslides, pest infestations, and post-harvest losses due to localized natural calamities. Farmers who are unable to sow crops due to adverse weather conditions are eligible for indemnity claims of up to 25% of the sum insured. Additionally, post-harvest losses are covered for up to 14 days, ensuring immediate relief for farmers facing distress.
The government has implemented several reforms to enhance the transparency and accountability of PMFBY. This has led to record-high participation, with non-loanee farmers—who voluntarily opt into the scheme without being mandated by institutional loans—comprising 55% of the total enrolled farmers in 2023-24. The total sum insured under the scheme has reached Rs 17.29 lakh crore, further highlighting its growing outreach and effectiveness. To ease the financial burden on farmers, some states have taken proactive steps by waiving their share of the premium, ensuring that farmers can access the benefits of crop insurance at even lower costs.
Over the past nine years, PMFBY has emerged as a lifeline for farmers, offering protection against the volatility of agricultural income due to climate-related adversities. Its success is evident in the significant claim disbursements, increased farmer participation, and continued governmental support to sustain and expand the program. With an emphasis on technology-driven efficiency, financial inclusivity, and responsive governance, the scheme is poised to strengthen India’s agricultural resilience in the years ahead.
