Objective of the Pradhan Mantri Fasal Bima Yojana:
Pradhan Mantri Fasal Bima Yojana (PMFBY) aims at supporting sustainable production in agriculture sector,
- By providing financial support to farmers suffering crop loss/damage arising out of unforeseen events
- Scheme is encouraging farmers to adopt innovative and modern agricultural practices
- It stabilizing the income of farmers to ensure their continuance in farming
- It ensuring flow of credit to the agriculture sector; which will contribute to food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from production risks.
The Scheme shall be implemented on an ‘Area Approach basis’ i.e., Defined Areas for each notified crop for widespread calamities with the assumption that all the insured farmers, in a Unit of Insurance, to be defined as ‘Notified Area’ for a crop, face similar risk exposures, incur to a large extent, identical cost of production per hectare, earn comparable farm income per hectare, and experience similar extent of crop loss due to the operation of an insured peril, in the notified area.
All farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.
The liability of the Insurance companies in case of catastrophic losses computed at the National level for an agricultural crop season, shall be upto 350% of total premium collected (farmer share plus Govt. subsidy) or 35% of total Sum Insured (SI), of all the Insurance Companies combined, whichever is higher.
The losses at the National level in a crop season beyond this ceiling shall be met by equal contribution (i.e. on 50:50 basis) from the Central Government and the concerned State Governments.
PMFBY will provide a comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers and encourage them for adoption of innovative practices.