Pradhan Mantri Fasal Bima Yojana | PM | PMFBY | Details

Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana

Prime Minister of India Narendra Modi launched Pradhan Mantri Fasal Bima Yojana on February 18, 2016. Its primary purpose is to give good medicines for the farmers’ crops, give them a good harvest of the crops, give Rabi, and freshen up the crops of Kharif. Farmers have to pay only 2 percent for Kharif crops and 1.5 percent for Rabi crops. The premium of annual commercial and horticultural crops will be 5%.
Parameters Details
Scheme Name Pradhan Mantri Fasal Bima Yojana (PMFBY)
Launched by PM Shree Narendra Modi
Budget Not defined
Launch Date 18th February 2016
Motive Premium: 2% Kharif and 1.5% for Rabi
Target Protecting farmers from harm
Scope of Yojana Across India

Pradhan Mantri Fasal Bima Yojana Objectives 

  • Providing insurance cover and financial support to farmers in the event of failure of any notified crop due to natural calamities, pesticides, and diseases by farmers through this scheme.
  • To continue farming continuously to stabilize the income of farmers.
  • Encourage the farmers to adopt innovative and modern farming practices.
  • To ensure the flow of credit to the agriculture sector.
  • Special rebate on electricity bills if farmers suffer a loss on agriculture.
Highlights of the PMFBY
  • The only premium for only 2% by farmers for all Kharif crops.
  • 5% premium payment will be made for all Rabi crops.
  • In the case of annual commercial and horticultural crops, the payment of premium paid by farmers will only be 5%.
  • The premium rates paid by farmers are very low, and if the government will pay the remaining premiums to give the entire sum insured to the farmers in case of loss of crops due to natural calamities.
  • There is no upper limit on government subsidies. Even if the balance premium is 90%, it will be borne by the government for the farmers.
  • Earlier, there was a provision for capping the premium rate, which gave fewer claims to the farmers. This capping was done to limit the government’s outgo on the premium subsidy. This capping has been removed, and the farmers will get the claim for the total sum insured without any shortage.
  • The use of technology will be encouraged to a great extent, in which the smartphones will be used to capture and upload harvesting data to reduce the delay in payment of claims to the farmers. Remote sensing will be used to reduce the number of harvesting experiments.
  • PMFBY is a replacement plan of NAIS / MNIIS, all the services included in the implementation of this scheme will be exempted from the service tax liability.
  • Through this new scheme, the government will ensure 75-80 percent subsidy of an insurance premium for farmers, which will prove to be very helpful in improving the economic condition of the farmers and moving forward.
PMFBY Cover for Farmers 

During the season of insurable interest in the crop, the farmers are eligible for the crops given in the following area.

Mandatory coverage: Nomination under the scheme, subject to possession of insurable interest on the cultivation of notified area in the notified area, will be mandatory for the following categories of farmers:

In the notified area, farmers who have a Crop Loan Account / KCC Account (called Lender Farmer), who are cleared/renewed the credit limit for the crop notified during the crop season. And such other farmers, which the government may decide to include from time to time.

Voluntary coverage: Voluntary coverage can’t be obtained by all the above-given farmers, including the KCC / Crop Loan account holders, whose credit line has not been renewed.

Risks Covered under the PMFBY 

  • Yield losses (vertical crop) will be covered due to non-preventable risks such as natural fire and electricity, storm, slurry, Tempest, Troucoda. Flood, flood and landslide, dry, dry mantra, crop risk due to pest/disease will also be covered.
  • In such cases, where most insurers of notified area intend to sow / plant and expenditure for this purpose, insured crops can be prevented from planting/planting due to adverse weather conditions, eligible for entire compensation claims. Sum Assured of 25% of the amount
  • After the crop loss, coverage will be available for harvesting those crops for a maximum of 14 days, which are kept in the “cut and spread” condition to dry in the area. 
  • There will also be loss/damage caused by fixed localized problems such as burglary, landslides, and waterways affecting separate farms in the notified area.

 Unit of insurance 

  • This scheme will be implemented on a ‘Regional Approach Basis,’ i.e., for the scheduled calamities for each notified crop, defined as “notified area” for all the insured farmers for a crop, mainly due to the same risk. There is a large-scale production. The exact cost per hectare earns the agricultural income per hectare, crop loss, etc., comparatively due to the operation of the insured crisis in the notified area.
  • The defined area (i.e., the unit area of insurance) is Village/village Panchayat level which assesses the major crops in these areas, and through this, the farmers get compensation.
  • If there is a natural crisis (fire, flood, storm, etc.) and for the risk of disasters and subsequent harvest loss, the insurance unit for the loss assessment will be the affected area of the individual farmer.
Activity Kharif Rabi
Loaning period (loan sanctioned) for Loanee
farmers covered on Compulsory basis.
April to July October to December
Cut-off date for receipt of Proposals of
farmers (loanee & non-loanee).
31-Jul 31st December
Cut-off date for receipt of yield data Within a month from
final harvest
Within a month from
final harvest
National Agricultural Insurance Scheme ( NAIS)

The government of India experimented with a comprehensive crop insurance scheme which failed. Then the Government of India introduced a new scheme called “National Agricultural Insurance Scheme” (NAIS) or “National Agricultural Insurance Scheme” (RKBY) in 1999-2000. This plan envisions coverage of all food crops (cereals and pulses), oilseeds, horticulture, and commercial crops. This includes all the farmers, borrowers, and non-debtors under the scheme. The premium amount for food crops is between 1.5% and 3.5%.

There are plans based on NAIS.

Regional approach-defined areas for each notified crop for widespread disasters.

On a personal basis – for local calamities like valleys, landslides, cyclones, and floods

Pradhan Mantri Fasal Bima Yojana Comparision with previous scheme



NAIS [1999]

MNAIS [2010]

PM Crop Insurance Scheme


Premium rate



Lower than even NAIS (Govt to contribute 5 times that of farmer)


One Season – One Premium





Insurance Amount cover





On Account Payment





Localised Risk coverage


Hail storm, Land slide

Hail storm, Land slide, Inundation


Post Harvest Losses coverage


Coastal areas – for cyclonic rain

All India – for cyclonic + unseasonal rain


Prevented Sowing coverage





Use of Technology (for quicker settlement of claims)








Yes (target to double coverage to 50%)