Understanding the Benefits of Fasal Bima Yojana in India.


In India, agriculture is the backbone of the economy, supporting a vast population directly or indirectly. However, being heavily dependent on the monsoon, farmers are highly vulnerable to weather risks, pests, and diseases that can devastate their crops and livelihoods. In light of this, the Government of India introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2016 to provide financial support to farmers in the event of crop failure due to natural calamities. This article aims to delve into the benefits of the Fasal Bima Yojana and its impact on the agricultural sector in India.

Understanding Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana is an innovative crop insurance scheme that integrates technology for the effective delivery of services to farmers. It replaced the erstwhile National Agricultural Insurance Scheme (NAIS) and the Modified National Agricultural Insurance Scheme (MNAIS) to provide comprehensive risk insurance for farmers.

The Key Features of Fasal Bima Yojana are as follows:

1. Premium Subsidy: The scheme offers a substantial premium subsidy to farmers, thereby making the insurance affordable for small and marginal farmers.

2. Comprehensive Coverage: The Fasal Bima Yojana covers all crops and post-harvest losses, ensuring a wide range of protection to farmers.

3. Timely Settlement of Claims: The scheme emphasizes the timely settlement of claims to provide immediate relief to farmers in distress.

4. Use of Technology: Fasal Bima Yojana integrates technology for quick assessment of crop losses, ensuring transparency and efficiency in claim settlement processes.

5. Flexibility: Farmers have the flexibility to choose their sum insured based on the scale of their farming operations, providing them with tailored coverage.

Benefits of Fasal Bima Yojana

1. Financial Security: One of the primary benefits of the Fasal Bima Yojana is that it provides financial security to farmers in the event of crop failure due to natural calamities. This reduces the economic burden on farmers and prevents them from falling into a debt trap.

2. Increased Risk-Taking Capacity: With the assurance of insurance coverage, farmers are more willing to adopt modern agricultural practices and invest in high-yielding but riskier crops. This leads to increased agricultural productivity and income.

3. Enhanced Resilience: The Fasal Bima Yojana enhances the resilience of farmers against climate change-related risks by providing a safety net during adverse weather conditions.

4. Boost to Rural Economy: By safeguarding farmer's incomes, the scheme contributes to the overall growth of the rural economy. Stable farm incomes lead to increased purchasing power, which, in turn, boosts rural consumption and demand.

5. Reduction in Distress Migration: Crop failures often force farmers to migrate in search of alternative livelihoods. The Fasal Bima Yojana helps in reducing distress migration by stabilizing farm incomes and providing a buffer against crop losses.

6. Improved Credit Access: Insured farmers are more likely to access formal credit facilities as they have insurance coverage to mitigate the risks associated with borrowing. This, in turn, encourages investments in farm inputs and technologies.

7. Sustainable Agriculture: By mitigating the risks associated with farming, the Fasal Bima Yojana promotes sustainable agricultural practices and encourages farmers to adopt climate-resilient crop varieties.

Challenges and Way Forward

While the Fasal Bima Yojana has several benefits, there are challenges that need to be addressed to maximize its impact. Some of the key challenges include:

1. Delayed Claim Settlement: Delayed claim settlement is a significant issue that needs to be addressed to maintain the trust of farmers in the scheme.

2. Lack of Awareness: Many farmers, especially in remote areas, have limited awareness about the benefits of crop insurance. Efforts should be made to increase awareness and participation.

3. Data Accuracy: Accurate assessment of crop losses is crucial for the success of the scheme. Leveraging technology for real-time monitoring and assessment can help improve data accuracy.

4. Premium Calculation: The method of premium calculation needs to be transparent and equitable to ensure that small and marginal farmers can afford the insurance.

5. Prevention of Moral Hazard: Measures should be taken to prevent moral hazard, where farmers may take risks knowing they are insured, leading to adverse selection.

In conclusion, the Pradhan Mantri Fasal Bima Yojana is a crucial step towards safeguarding farmer's incomes and promoting agricultural resilience in India. By addressing the challenges and continuously improving the implementation of the scheme, the government can ensure that it remains an effective tool for risk mitigation in the agricultural sector.


1. What is the eligibility criteria for enrolling in the Fasal Bima Yojana?
- Farmers owning insurable land are eligible for the scheme, including sharecroppers and tenant farmers.

2. How is the premium calculated under the Fasal Bima Yojana?
- The premium rates are based on the type of crop, the area sown, and the scale of benefits opted by the farmer.

3. Is there a provision for online application and claim settlement under the scheme?
- Yes, the Fasal Bima Yojana provides for online registration, premium payment, and claim settlement to enhance efficiency.

4. What is the coverage period under the Fasal Bima Yojana?
- The coverage period typically starts from the sowing of the crop and extends up to post-harvest losses due to defined perils.

5. How is the assessment of crop losses done under the scheme?
- Crop loss assessments are conducted through technology-driven methods, including satellite imagery and on-ground surveys for accurate estimation.

6. Can farmers claim compensation for losses other than those caused by natural calamities?
- No, the Fasal Bima Yojana specifically covers losses due to natural calamities like drought, flood, cyclone, etc.

7. Are there any support services provided to farmers under the scheme?
- Apart from insurance coverage, the Fasal Bima Yojana also offers training and capacity-building programs to enhance agricultural practices.

8. How can farmers register for the Fasal Bima Yojana?
- Farmers can approach their respective financial institutions, agricultural department offices, or Common Service Centers (CSCs) for enrollment in the scheme.

9. Is there a provision for government subsidies in the premium payment for farmers?
- Yes, the government provides significant premium subsidies to make crop insurance affordable for small and marginal farmers.

10. How has the Fasal Bima Yojana improved from the previous crop insurance schemes in terms of coverage and benefits?
- The Fasal Bima Yojana offers a more comprehensive coverage, timely settlement of claims, and increased technology integration compared to previous crop insurance schemes.

More from this stream