[op-ed snap] From plate to plough: Everybody loves a good crop

Image result for fasal bima yojana

Image Source


Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

Op-ed discusses details about Pradhan Mantri Fasal Bima Yojana ,its success and challenges in implementation.

Once you are done reading this op-ed, you will be able to fully attempt the below.

To what extend Pradhan Mantri Fasal Bima Yojana was able to address the farmers grievances? What are the challenges and issues involved in the implementation?

Prelims level: Pradhan Mantri Fasal Bima Yojana, Kharif crops, Rabi crops

Mains level: Merits and demerits of Pradhan Mantri Fasal Bima Yojana



  1. The sums insured under National Agriculture Insurance Scheme (NAIS), modified NAIS, and Weather Based Crop Insurance Scheme (WBCIS) were too low, as premiums were kept low and it was not based on any robust scientific system and had its own loopholes.
  2. Introduction of ‘Pradhan Mantri Fasal Bima Yojana’ –was a path breaking scheme for farmers’ welfare

Pradhan Mantri Fasal Bima Yojna (PMFBY)- a game changer

  1. Raised the sums insured to realistic levels, basically to cover the cost of cultivation of farmers.
  2. The premiums were heavily subsidised by the Centre and the states in equal proportions
  3. compared to kharif year2013, the number of farmers opting for the scheme increased by 210 per cent in kharif 2016, and the area covered increased by 126 per cent
  4. But the effectiveness of crop insurance scheme is based on how fast it can settle the claims of farmers.  It is here that the governance of the state is tested

Three critical steps in this process:

  1. The state has to notify the crops, make clusters of districts, determine the sums to be insured based on district level committees, and invite tenders from insurance companies;
  2. The state and the Centre have to pay premium to the companies providing insurance; and
  3. In case of crop damages, quickly assess the damages and ask companies to pay the claims of farmers

Challenges in the implementation

  1. If states delay notifications, or payment of premiums, or crop cutting data, companies cannot pay compensation to the farmers in time.
  2. Similarly, most states failed to provide smartphones to revenue staff to capture and upload data of crop cutting, which continues to come with enormous delay.
  3. There is hardly any use of modern technology in assessing crop damages.

 Way forward

  • There is an urgent need to link the insurance database with Core Banking Solution (CBS) so that when premium is deducted from a farmer’s bank account, the bank sends him a message informing about the premium, sum insured and name of insurance company.


Pradhan Mantri Fasal Bima Yojana

The highlights of this scheme are as under:

  1. Uniform premium:Farmers will pay uniform premium of 2 per cent for all Kharif crops and 5 percent for all Rabi crops.
  2. In case of annual horticultural and commercial crops, farmers will pay 5 per cent
  3. Government will pay balance premium to provide full insured amount to the farmers against crop loss on account of natural calamities.
  4. Government subsidy: There will be no upper limit subsidy given by Government even if balance premium is 90 percent.
  5. Capping the Premium: The provision of capping the premium rate has been removed and farmers will get claim against full sum insured without any reduction.
  6. It was removed as it resulted in low claims being paid to farmers and was mainly done to limit Government outgo on the premium subsidy.
  7. Use of technology: Government will encourage use of technology especially Smart phones and remote sensing to a great extent.
  8. In order to reduce the delays in claim payment to farmers, smart phones will be used to capture and upload data of crop cutting.
  9. To reduce the number of crop cutting experiments remote sensing will be used.



Notify of
Inline Feedbacks
View all comments