Pradhan Mantri Fasal Bima Yojana: Safeguarding Farmer Livelihoods

Introduction 

Introduced in February 2016, the Pradhan Mantri Fasal Bima Yojana (PMFBY) is India’s flagship crop insurance scheme. It was designed to consolidate earlier insurance programs under the “One Nation–One Scheme” approach—offering farmers a comprehensive, affordable, and timely safety net against losses from natural disasters, pests, and crop failures . Nearly a decade on, PMFBY continues to be a crucial pillar of agricultural resilience, striving to stabilize farmers' incomes amid unpredictable weather and market fluctuations.

Scheme Structure & Performance 

Objectives & Coverage

• Provide insurance against natural calamities (drought, flood, hailstorm), pests, diseases, and post-harvest losses .

• Encourage modern farming, ensure access to credit, and enhance agricultural sustainability .

• Covers food crops, oilseeds, and horticultural/commercial crops where yield data is available .

Implementation & Cost Sharing

• Operated on an area-based approach, administered through empanelled insurance companies selected by state governments .

• Premiums for farmers are highly subsidized:

  • Kharif crops: ~2%

  • Rabi crops: ~1.5%

  • Horticultural/Commercial crops: ~5%

  • Remaining premium shared equally between central and state governments (90:10 ratio for northeastern states) .

Reach & Impact (Nationwide)

• As of mid-2025, over 78 crore farmer applications insured, and ₹1.83 lakh crore disbursed in claims .

• In 2024–25, highest-ever participation: 4.19 crore farmers, with increasing shares from tenant, marginal, and loanee farmers .

• For Kharif 2025 onward, delays by states or insurers in contributions/claims will attract a 12% penalty—a step toward higher accountability 

On-the-Ground Developments & Criticisms 

Recent Government Actions

• On August 10, 2025, ₹3,200 crore in insurance claims were digitally transferred to 30 lakh farmers, under revamped rules aimed at speedier payouts .

• Simultaneously, Chhattisgarh farmers received ₹152.84 crore in compensation through DBT for losses across Kharif and Rabi seasons .

• In Karnataka, Kalaburagi district led with 2.9 lakh registrations, reflecting effective local-level awareness campaigns 

Challenges & Criticisms

• Maharashtra data (2016–17 to 2023–24) revealed a significant shortfall: ₹52,969 crore collected as premiums vs. only ₹36,350 crore paid out—indicating serious concerns over equity and effectiveness .

• At the national level, analysis of 2016–17 to 2022–23 shows ₹1.97 lakh crore collected, but only ₹1.40 lakh crore paid in claims—profits of nearly ₹57,619 crore, prompting debate over insurer fairness .

• In Karnataka, malpractices surfaced: agents colluding with officials to register fraudulent claims and denying compensation to genuine farmers—exposing gaps in oversight .

Comparative Overview: PMFBY Successes vs. Concerns 

Key Highlights at a Glance 

• Launch & Aim: Launched in Feb 2016 to streamline earlier schemes and offer affordable, comprehensive crop insurance.

• Broad Crop Coverage: Includes food grains, oilseeds, horticultural and commercial crops.

• Subsidized Premiums: Minimal cost to farmers, with substantial government subsidy.

• Technological Integration: PORTALs like YES-TECH and WINDS and mobile apps faster claim processing.

• Massive Reach: Over 78 crore applications insured; record 4.19 crore participants in 2024–25.

• Timely Relief: ₹3,200 crore disbursed to 30 lakh farmers; ₹152.84 crore to Chhattisgarh farmers.

• Regional Performance: Kalaburagi leads in enrollments; Maharashtra lags in payouts vs premiums.

• Criticism & Misuse: Insurance companies profiting; fraudulent registrations; delayed or denied claims.

• Policy Strengthening: Penalties for delay, improved monitoring; still requires enhancements in transparency.

Moving Forward: Sustaining Farmer Trust 

PMFBY remains an ambitious and potentially transformative scheme—crucial for safeguarding millions of farmers from devastating agricultural losses. Its strengths lie in broad coverage, financial reach, technological integration, and evolving policy framework.

Yet, to sustain impact and fairness, the following must be addressed:

1. Enhance Oversight and Transparency

   • Tackle misuse and agent fraud through stricter audits and grievance redressal.

2. Ensure Equitable Payouts

   • Align premiums and payouts; streamline revenue-circle-based assessments.

3. Boost Awareness in Underperforming Regions

   • Empower local administrations with campaigns to raise participation.

4. Expand Tech Adoption

   • Scale up platforms like YES-TECH, WINDS, and mobile apps for easier claims.

5. Timely Settlements

   • Uphold penalties and automate DBT payments to deliver relief swiftly.

Summary

The Pradhan Mantri Fasal Bima Yojana has come a long way since its inception—bringing insurance to the farmer's doorstep, even in remote areas. With 78 crore+ insured applications and ₹1.83 lakh crore disbursed in claims, it has become a cornerstone of India’s agricultural safety net.

While recent efforts like ₹3,200 crore in payouts and DBT initiatives showcase a responsive framework, challenges persist—most notably in equitable payouts, misuse, and financial fairness. By reinforcing transparency, ensuring swift payments, and boosting inclusion, PMFBY can continue empowering India's farmers in an increasingly uncertain climate.