Lok Sabha Question No. 1390 (UNSTARRED), answered on 2020-09-20
Subject: Pradhan Mantri Fasal Bima Yojana
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Raghu Ramakrishna Raju Kanumuru

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO. 1390

TO BE ANSWERED ON THE 20 TH  SEPTEMBER, 2020

## PRADHAN MANTRI FASAL BIMA YOJANA

1390.  SHRI KANUMURU RAGHU RAMA KRISHNA RAJU:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether the attention of the Government is drawn to the matter of Pradhan Mantri Fasal Bima Yojana launched as a part of its move to increase the income of farmers;
- (b) if so, the reasons for opting out of the scheme by State after State;
- (c) whether it is true that States are losing confidence in the banks since they charge high  premium  and  if  so,  the  remedial  measures  being  taken  by  the  Government  to increase the confidence of the farmers in the scheme?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी (SHRI NARENDRA SINGH TOMAR)

- (a) to (c): With a view to provide financial support to farmers suffering crop loss/damage  arising  out  of  unforeseen  event  and  to  stabilize  the  income  of  farmers  to ensure their continuance in agriculture, Government has introduced Pradhan Mantri Fasal Bima  Yojana  (PMFBY)  in  the  country  from  Kharif  2016  season.    27  States/Union Territories  (UTs)  have  implemented  the  scheme  in  one  of  more  seasons.    As  per provisions  of  the  scheme  actuarial/bidded  premium  rates  are  charged  by  the  insurance company.  However, farmers have to pay maximum 2% for Kharif crops, 1.5% for Rabi Crop and 5% for annual commercial/horticultural crops and the balance of actuarial/bidded premium is shared by the Central and State Government on 50 : 50 basis. However, this sharing has been changed to 90 : 10 for North Eastern States from Kharif 2020 season. Banks  are  collecting  farmers  share  of  premium  for  enrolment  under  PMFBY  and  fixed charges  of  4%  of  farmers  premium  are  paid  as  service  charges  to  them  by  insurance companies

Some  States  like  Bihar,  West  Bengal,  Andhra  Pradesh,  Gujarat  and  Jharkhand have  opted  out  of  the  scheme  and  started  their  own  assistance  schemes  in  place  of insurance  scheme.      Government  is  regularly  monitoring  the  implementation  of  PMFBY through  one  to  one/weekly  meetings  with  States  and  insurance  companies  and  weekly video conference with all stakeholders.  Keeping in view the experience of implementation of  PMFBY in 4 years and after detailed discussions with stakeholders, Government has recently approved the revamping of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured  Weather  Based  Crop  Insurance  Scheme  (RWBCIS)  and  made  several changes in it for implementation from Kharif 2020 season. Changes/improvements made in the provisions/parameters of these schemes are given in Annexure .

## Changes/Improvements made in the provisions/parameters of PMFBY and RWBCIS w.e.f. Kharif 2020 season

-  To address the demand of farmers, the scheme has been made voluntary for all farmers. However, there is no change in farmers' share of premium.
-  The premium subsidy sharing pattern between Centre and North Eastern States has been changed  from  50:50  to  90:10.    This  has  been  done  to  allow  more  States  to  notify  the scheme and existing States to notify more crops and areas to facilitate greater coverage of farmers under the scheme.  For remaining States, subsidy sharing pattern will continue as 50 : 50.
-  To address the issue of high premium rate for few crops/areas due to adverse selection, the requisite central share of premium subsidy (90 : 10 for North Eastern States and 50 : 50 for remaining States) will be provided for areas/crops upto gross premium rate of 25% for irrigated and 30% for un-irrigated areas/crops. Besides, alternate risk mitigation measures will be explored for these areas/crops.
-  Insurance companies will now be selected by the States for 3 years in a go instead of one year thereby increasing their commitment and accountability to the farmers.
-  Option has been given to the States to choose the notional value of average yield or the Scale of Finance as sum insured in the interest of the farming community.
-  In view of the demand of many states, option has been given to states to choose additional risk  covers  besides  shortfall  in  yield-based  cover  depending  upon  the  local  weather challenges and requirements of the farmers.
-  The states delaying the release of subsidy beyond stipulated timelines can not participate in upcoming seasons.
-  Two-step  process  of  crop  yield  estimation  using  weather  and  satellite  indicators  etc.  is adopted, which will help in early assessment of loss
-  Use  of  smart  sampling  technique  through  satellite  data  for  crop  cutting  experiments  by some  states  has  shown  increased  efficiency in implementation.  This will  now  be universalized.
-  The delay by some States in submission of crop yield data will now be suitably addressed using technological solutions.
-  Provision has been made for earmarked administrative expenses @ 3% for strengthening the infrastructure and technology usage for better delivery of the Scheme.
-  Insurance  companies  have  been  asked  to  mandatorily  utilize  0.5%  of  gross  premium collected by them for IEC activities at grass root level to build overall insurance literacy of farmers to take informed decisions.
-  Use of more technology for transparency and quick assessment of crop yield/loss for early settlement of claims.

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