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Changes in Pradhan Mantri Fasal Bima Yojana To Make It Optional For Farmers

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Changes in Pradhan Mantri Fasal Bima Yojana To Make It Optional For Farmers

What to study?

For Prelims: Overview, key features and facts.

For Mains: Significance of the Scheme, need for, challenges present and ways to address them.

Context: Cabinet Approves Changes in Pradhan Mantri Fasal Bima Yojana to address the existing challenges in implementation.

Changes approved:

  1. Allocation of business to Insurance Companies to be done for three years.
  2. Central Subsidy under PMFBY/RWBCIS to be limited for premium rates upto 30% for unirrigated areas/crops and 25% for irrigated areas/crops.
  3. Districts having 50% or more irrigated area will be considered as irrigated area/district.
  4. Flexibility to States/UTs to implement the Scheme with option to select any or many of additional risk covers/features like prevented sowing, localised calamity, mid-season adversity, and post-harvest losses.
  5. For estimation of crop losses/admissible claims, two-Step Process to be adopted based on defined Deviation matrix” using specific triggers like weather indicators, satellite indicators, etc. for each area along with normal ranges and deviation ranges.
  6. Enrolment under the Scheme to be made voluntary for all farmers.
  7. Central Share in Premium Subsidy to be increased to 90% for North Eastern States from the existing sharing pattern of 50:50.


  • With these changes it is expected that farmers would be able to manage risk in agriculture production in a better way and will succeed in Stabilizing the farm income.
  • Further, it will increase coverage in north eastern region enabling farmers of NER to manage their agricultural risk in a better way.
  • These changes will also enable quick and accurate yield estimation leading to faster claims settlement.


Under the PMFBY, which was launched in February 2016 by Prime Minister Narendra Modi, it is mandatory for loanee farmers to take insurance cover under this scheme. Currently, 58 percent of the total farmers are loanee. Various farmers’ body and states were raising some concerns on this.

About PMFBY:

Launched in 2016.

Merged schemes include National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS). It aims to reduce the premium burden on farmers and ensure early settlement of crop assurance claim for the full insured sum.


The Scheme covers all Food & Oilseeds crops and Annual Commercial/Horticultural Crops for which past yield data is available and for which requisite number of Crop Cutting Experiments (CCEs) are being conducted under General Crop Estimation Survey (GCES).


  • 2% for Kharif crops.
  • 1.5% for Rabi crops.
  • 5% for commercial and horticultural crops.

Sources: pib.