The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a critical scheme that provides crop insurance to farmers against natural disasters. In recent years, enrollment in this scheme has increased by 27%, reflecting its growing popularity and farmers' confidence in it. This article explores the historical perspective, benefits, technological advancements, and government efforts to expand coverage.

Historical Perspective of the Scheme:

Launched in 2016, the PMFBY has, over the past eight years, benefitted approximately 56.8 crore farmers. During this period, farmers received insurance claims worth ₹1,55,977 crore, even though they only paid a total premium of ₹31,139 crore. This means farmers received more than five times the benefit compared to their premium contribution.

A Demand-Driven Scheme for Farmers:

PMFBY is a demand-driven scheme, adopted voluntarily by both farmers and states. Over the past three years, enrollment has grown by 33.4%, 41%, and 27%, respectively. In 2023-24, 42% of enrolled farmers were non-loanee farmers, indicating that many are joining the scheme voluntarily.

The World’s Third Largest Insurance Scheme:

In terms of premium collection, the PMFBY ranks as the world’s third-largest insurance scheme. It protects farmers from crop loss due to natural disasters, helping to stabilize their income, especially during disaster-affected seasons. As a centrally-sponsored scheme, there is no separate allocation for states/union territories.

Technological Advancements for Transparency:

Several technological advancements have been implemented to make PMFBY more transparent. Key improvements include:

• Making the scheme voluntary for all farmers.
• Requiring insurance companies to spend at least 0.5% of the gross premium on Information, Education, and Communication (IEC) activities.
• Changing premium-sharing for northeastern states from 50:50 to 90:10.
• Introducing a three-year contract for insurance companies.
• Allowing states flexibility to select risk coverage based on their needs.
• Maximizing the use of digital technology.

Efforts to Increase Coverage: With government efforts, coverage under PMFBY has steadily increased, and farmers are willingly joining the scheme. Key steps taken to expand coverage include:

1. A three-year tender process for selecting insurance companies.
2. Introducing three optional risk models: profit and loss sharing, cap and cup (60-130), and cap and cup (80-110). If no claims are filed, a portion of the premium paid by the state government is refunded.
3. Utilizing technologies like the National Crop Insurance Portal (NCIP), YES-TECH, WINDS, and CROPIC.
4. Integrating state land records with NCIP and using the Public Finance Management System (PFMS) for direct claim settlement through the DigiClaim module.

A Transparent, Farmer-Friendly Scheme: To prioritize transparency in PMFBY operations, feedback from various stakeholders has been incorporated. The scheme is designed to ensure farmers receive their benefits timely and fairly. Operational guidelines have been improved to maximize benefits for farmers.