Farmers Receive Significant Returns On Investment In Crop Insurance

Jun, 2023 - by CMI

Indian Government Reports High Claims Ratio for PMFBY Crop Insurance Scheme

The Indian government has announced that for every Rs 100 paid in premium for the Pradhan Mantri Fasal Bima Yojana (PMFBY) crop insurance scheme, farmers have received Rs 514 in claims. The high claims ratio demonstrates the effectiveness of the scheme in providing financial protection to farmers against crop losses due to natural calamities.

According to data released by the Ministry of Agriculture and Farmers Welfare, the total claims paid to farmers under the PMFBY scheme amounted to Rs 90,000 crore between the 2016-2017 and 2020-2021 crop seasons. The data also showed that over 5.6 crore farmers have been covered by the scheme, which was launched in 2016 to replace the earlier National Agricultural Insurance Scheme (NAIS).

"The PMFBY scheme has been a game-changer for farmers across the country, providing them with financial security and protection against crop losses due to natural calamities," said Union Agriculture Minister Narendra Singh Tomar in a statement. "The high claims ratio is a testament to the effectiveness of the scheme and its impact on the lives of farmers."

The PMFBY scheme is a voluntary crop insurance scheme that covers all food and oilseed crops, as well as annual commercial and horticultural crops. The scheme provides comprehensive insurance coverage against various risks such as drought, flood, pest attacks, and post-harvest losses.

Under the scheme, farmers pay a nominal premium of 2% for Kharif crops, 1.5% for Rabi crops, and 5% for horticultural and commercial crops. The remainder of the premium is paid by the government to ensure that the insurance coverage is affordable and accessible to all farmers.

The high claims ratio under the PMFBY scheme is a positive sign for the agriculture sector, which has been grappling with a range of challenges such as climate change, water scarcity, and low productivity. The scheme has helped to mitigate the financial impact of crop losses on farmers and has encouraged them to adopt more sustainable and resilient farming practices.

While the PMFBY scheme has been successful in providing financial protection to farmers, there have been some concerns about the implementation of the scheme and its impact on small and marginal farmers. The government has acknowledged these concerns and has taken steps to address them, such as simplifying the claims process and increasing the coverage of non-loanee farmers.

Overall, the high claims ratio under the PMFBY scheme is a positive development for farmers and the agriculture sector as a whole. By providing financial protection and incentivizing sustainable farming practices, the scheme has the potential to transform the lives of millions of farmers and contribute to the growth and development of the agriculture sector.