PMFBY Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana is the crop insurance scheme launched in 2016, A scheme for Farmer’s welfare

Pradhan Mantri Fasal Bima Yojana
Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana was started in 2016. It aims to support sustainable development in agriculture. Under the ‘One nation-One scheme’ this scheme is a crop insurance scheme for farmers which was implemented in order to overcome the shortcomings of previous two such schemes:

  • National agricultural insurance scheme (NAIS)
  • Modified National agricultural insurance scheme (MNAIS)

Objectives of the scheme

  • It aims at providing insurance coverage and financial support to farmers in case of crop failure or crop damage of any notified crop.
  • To stabilize the income of farmers so that they continue farming.
  • It motivates farmers to adopt innovative and modern agricultural practices.
  • To ensure formal credit flow in the agricultural sector.
  • Ensure food security and crop diversification.

Crops covered under the scheme:

  • Food crops
  • Oilseeds
  • Commercial and horticulture crops

What kind of losses are covered under the scheme?

  • Yield losses
  • Post-harvest losses (within 14 days from the day of harvest)
  • Localised calamity (landslide, hailstorm, etc)

Features the scheme

  • Uniform premium to be paid by farmers for different crops:
    • Kharif crops- 2%
    • Rabi crops- 1.5%
    • Commercial and horticulture crops- 5%
  • The rest of the premium is to be shared by the Centre and the state in the ratio of 50:50.
  • Use of technology (like remote sensing) used for capturing crop data.
  • Subsidy up to 75% to 80% to be provided to farmers in insurance premiums.
  • The scheme also covers post-harvest losses.
  • It also covers farmers who haven’t taken a loan from any formal financial institutions.
  • The scheme is compulsory for all farmers who have availed credit from formal financial institutions and it is voluntary or optional for other farmers.

Who will implement the scheme

The scheme will be implemented by the Agriculture Insurance Company of India Limited in collaboration with other private insurance companies.


  • Lack of awareness about the scheme among farmers.
  • Need to stay careful from frauds in the insurance sector
  • The financial liability of the Centre and state is estimated to increase.
  • Financial infrastructure development is necessary because the compensation is paid directly to the farmer’s bank account.


This scheme is in sync with the government’s objective to double farmer’s income by 2022 the government. It aims to cover 145 million cropped areas over the next five years. The scheme is active since 2016.

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