Lok Sabha Question No. 97 (UNSTARRED), answered on 2021-02-02
Subject: Changes in PMFBY
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Ashok Kumar Rawat

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

## LOK SABHA UNSTARRED QUESTION NO.97

TO BE ANSWERED ON THE 2 ND  FEBRUARY, 2021

## CHANGES IN PMFBY

## 97. SHRI ASHOK KUMAR RAWAT:

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

- (a) whether major changes have been enacted by removing discrepancies in the old fasal bima yojana being replaced by Pradhan Mantri Fasal Bima Yojana (PMFBY)so that the farmers can avail maximum benefits and if so, the details thereof; and
- (b) whether the premium money being paid by the farmers under the Pradhan Mantri Fasal Bima Yojana has been reduced considerably and capping on payment premium has also been removed and if so, the details thereof?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

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

(a) & (b): The  revisions/improvements  in  the  crop  insurance  schemes  is  a  continuous process  and  decisions  on  suggstions/representations  are  taken  from  time  to  time  after consultation  with  various  stakeholders.        Accordingly,  Pradhan  Mantri  Fasal  Bima  Yojana (PMFBY)  has  been  introduced  from  Kharif  2016  to  provide  a  simple  and  affordable  crop insurance  product  to  ensure  comprehensive  risk  cover  for  crops  of  farmers  against  all  nonpreventable  natural  risks  from  pre-sowing  to  post-harvest,  to  provide  adequate  claim  amount and timely settlement of claims.   Based on the discussions with stakeholders, Government has introduced various changes over the erstwhile crop insurance schemes.  Major changes made interalia  include  very  low  premium  rates  i.e.  maximum  1.5% for  Rabi,  2%  for  Kharif food  and oilseed crops and 5% for commercial/horticultural crops and remaining part of the actuarial/bidded/premium is paid by the Government; removal of capping on premium, equating of sum insured with scale of finance/notional average yield to provide maximum risk coverage and adequate claim amount etc. to increase the benefit under PMFBY to farmers.

Based on the experience of  implementation of  PMFBY and  views  of  stakeholders,  the scheme and its Operational Guidelines were further revised/revamped twice  w.e.f. Rabi 201819  season  and  Kharif  2020  season  respectively.  Major  features  of  revamped  PMFBY  are annexed .

## Changes/Improvments made in the provisions/parameters of PMFBY 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 to 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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