Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana

What is PMFBY?


  • The Ministry of Agriculture and Farmers Welfare launched it in 2016 and is currently administering it.
  • It replaced the National Agricultural Insurance Scheme (NAIS) and the Modified National Agricultural Insurance Scheme (MNAIS).


Farmers including sharecroppers and tenant farmers growing notified crops in the notified areas are eligible for coverage.


  • To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & diseases.
  • To stabilize the income of farmers to ensure their continuance in farming.
  • To encourage farmers to adopt innovative and modern agricultural practices.
  • To ensure the flow of credit to the agriculture sector.


  • There will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In the case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%. Premium over and above these limits is shared by the Central and State Governments on a 50:50 basis except in the North Eastern Region where it is 90: 10.
  • There is no upper limit on Government subsidies. Even if the balance premium is 90%, it will be borne by the Government.
    • Previously, a provision existed for capping the premium rate, leading to the payment of low claims to farmers.
  • The removal of this capping now allows farmers to receive a claim for the full sum insured without any reduction.


  • PMFBY is currently the largest crop insurance scheme in the world in terms of farmer enrolments, averaging 5.5 crore applications every year, and the third largest in terms of premiums received.

During the arduous seasons of 2017, 2018, and 2019 marred by weather extremities, the scheme proved to be a decisive factor in securing the livelihoods of farmers wherein the claims paid ratio in several states averaged more than 100 % against the gross premium collected.

What are the Recent Changes?

  • The scheme was once mandatory for loanee farmers. In 2020, the Centre changed it to make it optional for all farmers.
  • The Centre decided in February 2020 to limit its premium subsidy to 30% for unirrigated areas and 25% for irrigated ones (from the existing unlimited). Previously, the central subsidy had no upper limit.
  • Recently introduced Weather Information and Network Data Systems (WINDS), Yield Estimation System based on Technology (YES-Tech), Collection of Real-Time Observations and Photographs of Crops (CROPIC) are some of the key steps taken under the scheme to bring in more efficiency and transparency.

Also checkout PM Janjati Adivasi Nyaya Maha Abhiyan.