Agriculture in India is wholly dependent on nature. Crop insurance scheme has been implemented to protect the farmers from perils of nature. The Central Govt. has announced a new format of Crop Insurance in name of “Pradhan Mantri Fasal Bima Yojana (PMFBY)”, to be implemented from 1st April’ 2016. PMFBY was launched with aim to support production in agriculture by providing an affordable crop insurance product to ensure comprehensive risk cover for crops of farmers and encourage them for adoption of innovative practices against all non-preventable natural risks from pre-sowing to post-harvest stage. The Scheme has completed 8 crop seasons and is being implemented across States/Union Territories (UTs).
The central Govt. has revamped operational guidelines of PMFBY which is effective from Kharif 2020. It aims to reduce the premium burden on farmers and ensure early settlement of crop assurance claim for the full insured sum.
OBJECTIVE OF THE SCHEME
Pradhan Mantri Fasal Bima Yojana (PMFBY) aims at supporting sustainable production in agriculture sector by way of –
- Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events;
- Stabilizing the income of farmers to ensure their continuance in farming;
- Encouraging farmers to adopt innovative and modern agricultural practices;
- Ensuring flow of credit to the agriculture sector, which will contribute to food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from production risks.
Adoption of Technology for Scheme Administration
- Government of India has designed and developed a National Crop Insurance Portal (NCIP) pmfby.gov.in which has been in use since Kharif 2018. This has brought in better administration and coordination amongst stakeholders viz. Farmers, States, Insurers and Banks as well as ensured real time dissemination of information and transparency in implementation.
- Implementing States and ICs during each crop season are required to digitize and upload basic information like notified areas, crops, sum insured, Government subsidy, and premium to be paid by farmers and name of the implementing IC in the particular insurance unit etc. This will facilitate farmers and other stakeholders to get the relevant information on Internet and through SMS for the concerned season.
- Secured credential/login, preferably linked with Aadhaar Number and mobile One Time Password (OTP) based, for all Stakeholders viz, Central Government, State Governments, Banks, empanelled ICs and their designated field functionaries will be provided on the Portal to enable them to enter/upload/download the requisite information.
- All data pertaining to crop-wise, Insurance Unit (IU) wise historical yield data, Notional value of average yield/Scale of Finance (SOF), Sown Area, Coverage and Claims data, Threshold Yield (TY) and Actual Yield (AY) shall be made available by the State Government on the NCIP for the purpose of premium rating and claim calculation, etc.
- Only those farmers whose data is uploaded on the NCIP and their share of premium has been remitted to the concerned IC within the prescribed time limit, shall be eligible for Insurance coverage. The premium subsidy from State and Central Government will be released accordingly.
IMPLEMENTING AGENCY (IA): The Scheme shall be implemented through a multi-agency framework by selected insurance companies under the overall guidance & control of the Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW), Ministry of Agriculture & Farmers Welfare (MoA&FW), Government of India (GOI) and the concerned State in co-ordination with various other agencies; viz Financial Institutions like Commercial Banks, Co-operative Banks, Regional Rural Banks and their regulatory bodies, Government Departments viz. Agriculture, Co-operation, Horticulture, Statistics, Revenue, Information/Science & Technology, Panchayati Raj etc.
MANAGEMENT OF THE SCHEME: The existing State Level Co-ordination Committee on Crop Insurance (SLCCCI), Sub Committee to SLCCCI, District Level Monitoring Committee (DLMC) already overseeing the implementation & monitoring of the ongoing crop insurance schemes like National Agricultural Insurance Scheme (NAIS), Weather Based Crop Insurance Scheme(WBCIS), Modified National Agricultural Insurance Scheme(MNAIS) and Coconut Palm Insurance Scheme(CPIS) shall be responsible for proper management of the Scheme. IA shall be an active member of SLCCCI and District Level Monitoring Committee (DLMC) of the scheme.
UNIT OF INSURANCE: The Scheme shall be implemented on an ‘Area Approach basis’ i.e., Defined Areas for each notified crop for widespread calamities with the assumption that all the insured farmers, in a Unit of Insurance, to be defined as ‘Notified Area’ for a crop, face similar risk exposures, incur to a large extent, identical cost of production per hectare, earn comparable farm income per hectare, and experience similar extent of crop loss due to the operation of an insured peril, in the notified area.
For Risks of Localized calamities and Post-Harvest losses on account of defined peril, the Unit of Insurance for loss assessment shall be the affected insured field of the individual farmer.
CROPS AND NOTIFIED AREA
CROPS: The Scheme can cover all the Crops for which past yield data is available and grown during the notified season, in a Notified Area and for which yield estimation at the Notified Area level will be available based on requisite number of Crop Cutting Experiments (CCEs) being a part of the General Crop Estimation Survey (GCES).
NOTIFIED AREA: Notified Area is the Unit of Insurance decided by the State Govt. for notifying a Crop during a season. The size of the Unit of Insurance shall depend on the area under cultivation within the unit. For major crops, the Unit of Insurance shall ordinarily be Village/Village Panchayat level and for minor crops may be at a higher level so that the requisite number of CCEs could be conducted during the notified crop season. States may Notify Village / Village Panchayat as insurance unit in case of minor crops too if they so desire.
COVERAGE OF FARMERS
All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage having insurable interest for the insured crops and lands. Farmers are required to essentially submit Aadhaar Number and declaration about the crop sown/ crops intended to be sown.
Farmers availing the Kisan Credit Card (KCC)/Crop loan/Loanee Farmers: The scheme is optional for all farmers for the notified crops. Loanee farmers have the option of opting-out from the Schemes by submitting declaration to the bank branches at least seven days prior to the cut-off date for enrollment. All those farmers who do not submit the declaration would be essentially covered.
Sub-standard categorised Loanee shall not be considered as a Loanee farmer. However, bank may facilitate such farmers for enrollment as non-loanee farmers.
Other Farmers/Non-loanee Farmers: The Scheme is optional for all farmers including non-loanee farmers/other farmers.
COVERAGE OF CROPS
- Food crops (Cereals, Millets and Pulses).
- Annual Commercial / Annual Horticultural crops.
- In addition, pilots for coverage can be taken for those perennial horticultural/commercial crops for which standard methodology for yield estimation is available.
COVERAGE OF RISKS
Basic Cover: The basic cover under the scheme covers the risk of loss of yield to standing crop (sowing to harvesting). This comprehensive risk insurance is provided to cover yield losses on an area-based approach basis due to non-preventable risks like:
- Natural Fire and Lightning
- Storm, Hailstorm,Cyclone, Typhoon, Tempest, Hurricane, Tornado etc.
- Flood, Inundation and Landslide
- Drought, Dry spells(v) Pests/ Diseases etc.
Add-On Coverage: Apart from the mandatory basic cover, the State Governments/UTs, in consultation with the State Level Coordination Committee on Crop Insurance (SLCCCI) may choose any or all of the following add-on covers based on the need of the specific crop/area in their State to cover the following stages of the crop and risks leading to crop loss.
- Prevented Sowing / Planting / Germination Risk: Insured area is prevented from sowing / planting / germination due to deficit rainfall or adverse seasonal/climatic conditions.
- Mid-Season Adversity: Loss in case of adverse seasonal conditions during the crop season viz. floods, prolonged dry spells and severe drought etc., wherein expected yield during the season is likely to be less than 50% of the normal yield. This add-on coverage facilitates the provision for immediate relief to insured farmers in case of occurrence of such risks.
- Post-Harvest Losses: Coverage is available only up to a maximum period of two weeks from harvesting, for those crops which are required to be dried in cut and spread / small bundled condition depending on requirement of the crops in that area, in the field after harvesting against specific perils of hailstorm, cyclone, cyclonic rains and unseasonal rains.
- Localized Calamities: Loss/damage to notified insured crops resulting from occurrence of identified localized risks of hailstorm, landslide, inundation, cloud burst and natural fire due to lightening affecting isolated farms in the notified area.
- Add-on coverage for crop loss due to attack by wild animals: The States may consider providing add-on coverage for crop loss due to the attack by wild animals wherever the risk is perceived to be substantial and is identifiable.
General Exclusions: Losses arising out of war and nuclear risks, malicious damage and other preventable risks shall be excluded.
Insurance Amount: In case of loanee farmers under compulsory component, the sum insured would be equal to scale of finance for that crop as fixed by DLTC which may extend up to the value of the threshold yield of the insured crop at the option of insured farmer. For farmers covered on voluntary basis the sum-insured is up to the value of threshold yield i.e. threshold yield x (MSP or gate price) of the insured crop.
PREMIUM RATES AND PREMIUM SUBSIDY
The Actuarial Premium Rate (APR) would be charged under PMFBY& RWBCIS by implementing Insurance Company. The rate of premium payable by the farmer will be as per the following Table:
|Food & Oilseeds crops (all cereals, millets, pulses) & oilseeds.
|2.0% of SI or Actuarial rate, whichever is less.
|Food & Oilseeds crops (all cereals, millets, pulses) & oilseeds.
|1.5% of SI or Actuarial rate, whichever is less.
|Kharif & Rabi
|Annual Commercial or Horticultural crops.
|5.0% of SI or Actuarial rate, whichever is less.
|Perennial horticultural / commercial crops (pilot basis)
|5.0% of SI or Actuarial rate, whichever is less.
Payment of Government Subsidy: All farmers enrolled under the scheme would be entitled for admissible subsidy on the Actuarial Premium.
The difference between Actuarial Premium Rate (APR) and the Rate of Insurance premium payable by farmers shall be treated as the Rate of Normal Premium Subsidy, which shall be shared equally in 50:50 ratio by the Centre and States/UTs in all States/UTs except North Eastern Region (NER) where subsidy sharing pattern between the Centre and States will be in the 90:10 ratio.
COVERAGE OF NON-LOANEE FARMERS
- A non-loanee farmer seeking coverage has to submit a declaration within the cut-off date to any bank branch along with premium.
- He should open a SB account with this branch.
- The non-loanee farmer should submit Xerox copies of his land record for verification.
- The nodal branch should remit the premium for non-loanee farmers by means of a separate draft.
- The non-loanee farmers can also send the premium directly to Insurance Agency.
INDEMNITY LEVEL (IL) AND THRESHOLD YIELD (TY)
Three levels of Indemnity, viz., 70%, 80% and 90% corresponding to crop Risk in the areas shall be available for all crops. The Threshold Yield (TY)shall be the benchmark yield level at which Insurance protection shall be given to all the insured farmers in an Insurance Unit. The Threshold Yield for a crop in an Insurance Unit shall be based on average yield of last seven years excluding two years of declared calamity if any, multiplied by the level of indemnity of the area.
ASSESSMENT & CLAIM PROCEDURE
Yield losses at Notified Area level: Once the yield data is received from the State/UT Govt. as per the prescribed cut-off dates, claims will be processed, approved and settled by IA.
If the ‘Actual Yield’ (AY) per hectare of the insured crop for the defined area [on the basis of requisite number of Crop Cutting Experiments (CCEs)] in the insured season, falls short of the specified threshold yield (TY) Yield’ (RY), all the insured farmers growing that crop in the defined area are deemed to have suffered shortfall in their yield.
The scheme seeks to provide protection against such contingency to all insured farmers of an Insurance Unit
Claim Pay-outs based on Yield losses shall be calculated as per the following formula:
ASSESSMENT OF CLAIMS
Assessment of prevented Sowing: In case of majority of insured crops of a notified area are prevented from sowing/planting the insured crops due to adverse weather conditions that will be eligible for indemnity claims up to maximum of 25% of the sum-insured.
Localized Calamity Loss Assessment: Loss assessment and modified indemnity procedures in case of occurrence of localized perils, such as hailstorm, landslide, flood, and inundation shall be for a cluster of affected farms or affected village and the settlement of claims, if any, will be each insured farmer covered under assessment.
Post-Harvest Loss Assessment: Loss assessment and indemnity procedures in case of occurrence of Post- Harvest Loss shall be for a cluster of affected farms or affected village and the settlement of claims, if any, will be each insured farmer covered under assessment.
N.B.: The District Administration will assist IA in assessing the extent of loss.
On-Account Payment of Claims due to Mid-Season Adversity: In case of adverse seasonal conditions during crop season viz. floods, prolonged dry spells, severe drought, unseasonal rains, IA in consultation with concerned State Government/UT based on agro meteorological data/ satellite imagery or any other proxy indicator will decide about crops/ areas for which on account payment will be made, not exceeding 25% of likely claims. Appraisal of mid-season adversity and quantum of on-account payment will be established jointly by Government of India/concerned State Government/UT and IA.
PROCEDURE FOR SETTLEMENT OF CLAIMS
For coverage through Banks: The claim amount along with particulars will be released to the individual Nodal Banks. The Banks at the grass-root level, in turn, shall credit the accounts of the individual farmers and display the particulars of beneficiaries on their notice board. The Banks shall provide individual farmer wise details claim credit details to IA and shall be incorporated in the centralised data repository.
For coverage through other insurance intermediaries: The claim amount will be released electronically to the individual Insured Bank Account.
CALENDAR OF ACTIVITY
The time-lines for coverage, submission of yield data, price data etc. shall be decided by the SLCCCI strictly keeping in mind the onset of monsoon, sowing period, crop cycle etc. The seasonality discipline shall be same for loanee and non-loanee farmers. The cut-off date for enrollment of each notified crop should be based on crop calendars of the districts and normally may not be beyond 15 July for Kharif th season and 15 December for Rabi crops. Preferably notified crops may be categorized in three seasons Kharif, Rabi & Summer/Zaid crops depending on sowing period and the cut-off date for enrollment may also be fixed accordingly.
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