Pradhan Mantri Fasal Bima Yojana (PMFBY) is a government-backed crop insurance scheme that provides financial protection to farmers against specified crop losses caused by unavoidable natural risks. Launched in 2016, the scheme is implemented through selected insurance companies under the Ministry of Agriculture and Farmers Welfare.
The scheme aims to help farmers manage the financial impact of crop damage and provide insurance coverage at a subsidised premium.
This article will explain what PMFBY is, benefits, and FAQs.
Key Takeaways
- Farmers pay low premium rates (1.5% to 5%), while the subsidy on the remaining actuarial cost is shared between the Central and State Governments (with the Centre bearing a higher share in North-Eastern and Himalayan states).
- It covers several stages of the crop cycle, from prevented sowing to standing crops, post-harvest damage, and localised calamities, for notified crops and areas and subject to exclusions.
- Crop insurance is completely optional for both loanee and non-loanee farmers.
- Utilises satellite imagery, drones, and smartphone apps for rapid, transparent crop assessment and claim settlement.
- Insurance payouts are credited directly to beneficiaries' Aadhaar-seeded bank accounts to eliminate leakages.
What is the PMFBY Scheme?
Launched in 2016, the Pradhan Mantri Fasal Bima Yojana is a comprehensive crop insurance scheme that provides financial support to farmers suffering crop loss or damage from unforeseen natural calamities.
It replaced the older National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS) by addressing major gaps, notably by lowering farmer premium rates and removing the cap on the government's premium subsidy that had earlier led to reduced sums insured and lower claim payouts.
Objectives of PMFBY Scheme
- Financial Stabilisation: To provide insurance coverage and financial security to farmers if any notified crop fails due to natural calamities, pests, or diseases.
- Credit Flow Maintenance: To encourage farmers to adopt innovative and modern agricultural practices while ensuring a continuous flow of credit to the agriculture sector.
- Income Stability: To stabilise farmers' incomes so they can continue farming operations despite severe climate shocks.
Eligibility of PMFBY
- Target Audience: All farmers growing notified crops in notified areas, including landowners, tenant farmers, and sharecroppers, are eligible.
- Voluntary Status: Enrollment is completely optional for all farmers, regardless of whether they have active agricultural bank loans.
Document Checklist and Verification Requirements
Applicants must provide land records (such as Khatauni or 7/12 extracts), valid identity proof, an Aadhaar-seeded bank passbook, and a sowing certificate. Tenant farmers must provide a valid lease or tenancy agreement.
How Pradhan Mantri Fasal Bima Yojana (PMFBY) Works
Step 1: Notification and Crop Selection
- Notified Areas and Crops: State governments notify specific crops and geographical units (such as gram panchayats, blocks, or districts) eligible for insurance coverage during a particular season (kharif or rabi).
- Voluntary Participation: Enrollment is optional for all farmers, whether they take out agricultural bank loans or operate independently.
Step 2: Enrollment and Premium Payment
Farmers register for the scheme before the cutoff dates set by state authorities. They pay a fixed, minimal fraction of the total insurance cost (actuarial premium), while the remaining balance of the actuarial premium is paid as a subsidy, generally shared equally by the Central and State Governments (the Centre bears a higher share in the North-Eastern and Himalayan states):
- Kharif food crops and oilseeds: 2% of the sum insured.
- Rabi food crops and oilseeds: 1.5% of the sum insured.
- Annual commercial and horticultural crops (in either season): 5% of the sum insured.
Example
Suppose the sum insured for a Kharif food crop or oilseed is ₹1,00,000. The maximum farmer premium at 2% is ₹2,000, subject to the applicable scheme provisions.
Four-Stage Risk Coverage for PMFBY
The scheme protects crops across their entire agricultural lifecycle through four distinct operational windows:
- Prevented Sowing: If adverse weather conditions prevent farmers from sowing or planting crops in the insured area, indemnity claims up to 25% of the sum insured are triggered.
- Standing Crops: Yield-loss cover against non-preventable risks like drought, dry spells, floods, landslides, storms, hailstorms, cyclones, natural fire and lightning, and widespread pest and disease attacks.
- Post-Harvest Losses: Coverage for up to 14 days post-harvest if crops left drying in fields are damaged by unseasonal rains, cyclones, or hailstorms.
- Localised Calamities: Assessment of damage to individual farms caused by identified perils such as hailstorm, landslide, inundation, cloudburst, and natural fire due to lightning. From Kharif 2026, crop loss from wild animal attacks (as the fifth add-on under localised risks) and paddy inundation (reintroduced) are also covered, where notified by the state. Losses must be reported within 72 hours.
Assessment of Crop Yields
To calculate losses, authorities combine traditional methods with modern technology:
- Crop Cutting Experiments (CCEs): Authorities harvest physical samples across notified units to determine actual yields.
- Technology Integration: Authorities deploy satellite remote sensing data, drone imaging, and weather proxy indicators to verify loss estimates quickly and objectively.
- Remote Sensing and Drones: Used alongside satellite imagery to assess crop health and accurately estimate crop losses over large areas.
- Smartphones and Apps: The Crop Insurance App enables seamless enrollment, real-time claim tracking, and instant reporting of localised damage by farmers.
- Yield Estimation: Integration with digital land records and digitised crop cutting reports (CCRs) speeds up data processing for insurance companies.
Claim Calculation and Settlement
Area-based yield loss: For widespread losses to standing crops, the actual yield of the notified crop in the insurance unit (for example, a gram panchayat or block) is compared with the pre-defined Threshold Yield, which is based on past average yields. If the unit's yield is lower, farmers who insured that crop in the unit become eligible for claims; no individual claim is needed. Losses to individual farms from localised calamities and post-harvest damage are assessed separately, after the farmer reports them.
Direct Payouts: Once state governments verify and approve loss data, insurance companies disburse claims directly into the beneficiary’s Aadhaar-seeded bank account, ensuring transparency and eliminating middlemen.
What PMFBY Does Not Cover
While PMFBY covers specified losses from unavoidable natural risks, it does not cover damage arising from preventable, man-made, or non-notified events.
The primary exclusions under the scheme include:
- Preventable Risks: Losses from other preventable risks, as defined in the scheme’s operational guidelines.
- Malicious and Man-Made Incidents: Losses from malicious damage, theft, and riots.
- War and Nuclear Perils: Losses from war and kindred perils and nuclear risks.
- Animal Damage: Crops grazed or destroyed by domestic animals are excluded. Damage from wild animal attacks is covered only under the add-on cover, where the state has notified it.
- Non-Notified Risks and Crops: Uninsured events occurring outside the specific crops, geographical insurance units, or risk windows defined by state government notifications.
Who Can Apply for PMFBY?
Farmers growing notified crops in notified areas can be covered under PMFBY, subject to the applicable eligibility and enrolment conditions.
The official PMFBY portal provides facilities for farmers to register, apply for crop insurance, and check application or policy status.
How to Check the Status of PMFBY Scheme?
Farmers can track their application and claim status easily through digital channels:
- Visit the official National Crop Insurance Portal (pmfby.gov.in)
- Click on the ‘Application Status’ or ‘Check Status’ tab
- Enter your Receipt Number, application ID, or registered mobile number
- View real-time details regarding your policy approval, premium deduction, and claim settlement progress
Mandatory Reporting and PMFBY Claim Rules
The 72-Hour Rule: For localised calamities and post-harvest losses, report the damage within 72 hours through the Crop Insurance App (with geo-tagged photographs where required), the PMFBY portal, the toll-free helpline 14447, or the insurance company or local agriculture department. Widespread yield losses are assessed from area-level yield data and do not require this report.
- Technology-Driven Assessment: Yield losses for standing crops are calculated using a blend of traditional Crop Cutting Experiments (CCEs) and modern tech (satellite imagery and drone data).
- Direct Benefit Transfer (DBT): Approved claims are transferred electronically and directly into the beneficiary's Aadhaar-seeded bank account.
Conclusion
The Pradhan Mantri Fasal Bima Yojana (PMFBY) plays an important role in helping farmers manage the financial risks associated with crop production. By offering crop insurance with subsidised farmer premiums, PMFBY seeks to make insurance more accessible while providing financial support for eligible losses covered under the scheme. Its coverage can extend across different stages of crop production, subject to the notified crops, areas, and applicable conditions.
