MASTER SEMINAR PRESENTATION (AGM-591)
ON
CROP INSURANCE, ITS IMPORTANCE AND PROCEDURE TO CLAIM
PRESENTED TO
Dr. G. K. DAS PRESENTED BY
PROFESSOR DHARMENDRA KUMAR SINGH
(AGRICULTURAL METEOROLOGY) UNID-20240072
[Link]. 1st YEAR / SEM
DEPARTMENT OF AGRICULTURAL METEOROLOGY
INDIRA GANDHI KRISHI VISHWAVIDYALAYA RAIPUR (C.G.)
COLLEGE OF AGRICULTURE, RAIPUR
1 Introduction
2 Importance of crop insurance
3 Historical Background
TABLE OF 4 Pradhan Mantri Fasal Bima Yojana
CONTENTS
5 Weather Based Crop Insurance
Scheme
7 Procedure to claim the insurance
8 Conclusion
9 Reference
Crop Insurance: Crop Insurance is a tool
for protection against loss or damage to
crops due to natural calamities and other
specified non preventable risks. It is a
financial mechanism in which the
uncertainty of loss in crop yields is
minimized by pooling large number of
uncertainties that impact on crop yields so
that the burden of loss can be distributed.
Source:- [Link]
Importance of Crop Insurance
1. Stability in Income: It protects the farmers against losses caused by crop failure. It acts like a tool farmers
to manage their yield and price risks.
2. Minimal Debts: Farmers are able to repay their loans even during the time of crop failure with the support
of the right insurance partner.
3. Technological Advancement: Insurance companies work along with Agri platforms who use IOT to
enhance agriculture practices and reduce farmers losses. This helps farmers to understand latest
technological advancement and improve their crop production.
4. Yield Protection: Crop Insurance protects farmers against production loss for crops. It also offers
preventive planting and replant security.
5. Provides Awareness: Insurance companies provide awareness campaigns to help farmers understand the
effect of natural calamities and also protect their farms.
The Historical Background of Crop Insurance - Before and After Independence
Pre –Independence Scenario Post –Independence Scenario
• In 1915, Mr. J. S. Chakravarthi of state • After independence in 1947, Crop Insurance
Mysore had proposed a scheme regarding gradually found mention in the media more
the rain insurance for the farmers for often.
drought.
• Rajendra Prasad, Minister of Food and
• His scheme was based on an area approach. Agriculture gave assurance to the Government
that it would re-examine its crop insurance.
• He published a number of research papers in
the Mysore Economical Journal to enlighten • The Government of India decided to introduce
the concept of rainfall insurance. a crop Insurance Bill in October 1965.
• In 1970, the draft Bill and the Model scheme
• States like Madras, Dewas, and Baroda also were referred to an expert committee; leading
made attempts to introduce crop insurance by Dr. Dharam Narayan.
relief in various forms but get little success.
The Historical Background of Crop Insurance - Before and After Independence
CROP INSURANCE INITIATIVES
[Link]. Time Frame Initiative/Scheme
1. (1972-1978) Individual Approach Basis
2. (1979-1984) Pilot Crop Insurance Scheme (PCIS)
3. (1985-1999) Comprehensive Crop Insurance Scheme (CCIS)
4. (1999-2010) National Agricultural Insurance Scheme (NAIS)
5. (2007-08) Weather based crop insurance scheme (WBCIS)
6. (2010-11) Modified national agricultural insurance scheme
(MNAIS)
7 (2016 – Present) Pradhan Mantri Fasal Bima Yojana (PMFBY)
Crop Insurance Scheme in India
01. Pradhan Mantri Fasal Bima Yojana (PMFBY)
02.
Weather Based Crop Insurance Scheme (WBCIS)
A farmer must compulsory have coverage under any of these schemes mentioned above to avail
of a crop loan for the notified crops. However, the coverage under these schemes is voluntary for
loanee and non-loanee farmers.
Crop Insurance Schemes
Weather Based Crop Insurance Scheme
Weather Based Crop Insurance Scheme (WBCIS) is intended to provide insurance
protection to the farmers against adverse weather incidence, such as deficit and excess
rainfall, high or low temperature, humidity etc. which are deemed to impact adversely the
crop production. It has the advantage to settle the claims within shortest possible time.
Weather Based Crop Insurance Scheme (WBCIS)| National Portal of India
Pradhan Mantri Fasal Bima Yojana
• The Pradhan Mantri fasal bima yojana (PMFBY) launched
on 18 February 2016 by Prime Minister Narendra Modi is an
insurance service for farmers for their yields.
• It was formulated in line with One Nation–One Scheme theme by
replacing earlier two schemes
Agricultural insurance in India National Agriculture Insurance Scheme and
Modified National Agricultural Insurance Scheme by incorporating their
best features and removing their inherent drawbacks (shortcomings).
AIM: To reduce the premium burden on farmers and ensure early
settlement of crop assurance claim for the full insured sum.
Pradhan Mantri Fasal Bima Yojana - Wikipedia
HIGHLIGHTS OF PMFBY
The Scheme shall be implemented on an 'Area Approach basis'.
This is centrally sponsored scheme. the central and state share of premium subsidy is 50:50 and for
northern state 90:10.
There is a caping on the premium subsidy by central goverment is 30% un irrigated and 25% on
irrigated.
At present 23 states/UTS are emplementing scheme.
The scheme is now the largest in the world in terms of farmers applications, and third largest in
terms of premium collection.
Post harvest losses will also be covered in PMFBY.
Remote sensing will be used to reduce the number of crop cutting experiments.
Affordable Premiums: The maximum premium payable by the farmer will be 2% for the Kharif food
and oilseed crops. For rabi food and oilseeds crop, it is 1.5% and for yearly commercial or
horticultural crops it will be 5%. The remaining premium is subsidized by the government.
Comprehensive Coverage: The scheme covers natural disasters (droughts, floods), pests, and
diseases. Post-harvest losses due to local risks like hailstorms and landslides are also included.
Timely Compensation: PMFBY aims to process claims within two months of the harvest to ensure
that farmers get the compensation quickly, preventing them from falling into debt traps.
Technology-Driven Implementation: PMFBY integrates advanced technologies like satellite
imaging, drones, and mobile apps for precise estimation of crop loss, ensuring accurate claim
settlement
Pradhan Mantri Fasal Bima Yojna (PMFBY)
RISKS TO BE COVERED IN PMFBY
YIELD LOSSES (standing crops, on notified area basis): Comprehensive risk insurance
is provided to cover yield losses due to non-preventable risks, such as
(i) Natural Fire and Lightning
(ii) Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado etc.
(iii) Flood and Landslide
(iv) Drought, Dry spells
(v) Pests/ Diseases etc..
EXCLUSIONS IN PMFBY
Risks and Losses arising out of following perils shall be excluded:-
War
Nuclear risks, riots,
Malicious damage,
Theft, act of enmity,
Grazed and/or destroyed by domestic and/or wild animals,
In case of Post-Harvest losses, the harvested crop bundled and heaped at a place before
threshing,
other preventable risks.
INSURANCE PREMIUM RATE
[Link] Season Crop Premium Rate
1. Kharif All cereals, millets, pulses and oilseeds 2% of sum Insured
(PMFBY) crop
2. Rabi All cereals, millets, pulses and oilseeds 1.5% of sum Insured
(PMFBY) crop
3. Kharif & Rabi Annual, commercial crops 5% of sum Insured
(PMFBY)
4. Kharif & Rabi Commercial horticulture crops 5% of sum Insured
(RWBCIS)
Pradhan Mantri Fasal Bima Yojana Scheme: Guide of Crop Insurance for Farmers
[Link]
TERM CONDITION
• In the notified IU, more than 75% of the sowing area
should be affected
Prevented / Failed Sowing and Prevented
Planting /Germination (deficit rainfall or • This condition is applicable up to 30 days from the start
adverse seasonal/climatic conditions) of sowing but no later than 15 days from cut-off date for
enrolment
• Notification is issued by the state government
• 25% of the Sun insured is disbursed immediately to the
farmer and the policy is terminated
TERM CONDITION
• Expected loss in crop yield is likely to be 50% or more
Mid-term adversity (floods, prolonged dry
spells and severe drought) • The state govterment issues the notification
• 25% of the likely claim is disbursed immediately after
assessment
• Remaining claim amount if any is adjusted after CCE
based yield assessment, at the time of final settlement
TERM CONDITION
Localized calamities (hailstorm, landslide, • Crop loss assessment is done at individual farrn level.
inundation, cloud burst and natural fire due to
lightening). • The insured farmer must inform the district/block,
agriculture office insurance company, bank etc. within
72 hours.
TERM CONDITION
Post-harvesting loss (hailstorm, cyclone, • Damage to the harvested crops lying in the farms in Cut
cyclonic rain and unseasonal rain). & Spread condition for the purpose of drying.
• The risk cover is provided for 14 days after harvesting.
• The insured farmer must inform the district/block,
agriculture office insurance company, bank etc. within
72 hours.
ISSUES AND CHALLENGES IN CROP INSURANCE
🌾 1. Low Awareness Among Farmers
• Many small and marginal farmers are unaware of crop insurance schemes like PMFBY (Pradhan Mantri
Fasal Bima Yojana).
• Misunderstanding of scheme benefits and claim procedures discourages enrollment.
📉 2. Low Coverage
• Crop insurance covers only a fraction of the total cropped area.
• Tenant farmers, sharecroppers, and landless laborers often remain excluded due to lack of land records.
🧾 3. Inaccurate and Delayed Claim Settlement
Claims are often delayed due to:
• Lack of timely crop-cutting experiments (CCEs)
• Poor coordination between insurance companies and local agencies
4. Inadequate Risk Assessment
• Traditional area-based assessment lacks precision.
• Remote sensing and weather data are underutilized or not integrated properly.
💸 5. High Premium and Burden on State Finances
• Though farmers pay a subsidized premium (2%-5%), the rest is borne by the state and central
governments.
• Some states face budget constraints and delay their share, which impacts implementation.
It's importance and
procedures to claim
e
.
CONCLUSION
Crop insurance plays a crucial role in safeguarding farmers against financial losses due to
unpredictable risks such as droughts, floods, pests, and market fluctuations. It provides stability to
agricultural income, encourages investment in modern farming techniques, and ensures food security
by reducing the impact of crop failures.
While crop insurance offers significant benefits, challenges such as accessibility, timely claim
settlements, and awareness among farmers need to be addressed for its effective implementation.
Governments and private insurers must work together to improve coverage, streamline processes, and
educate farmers about its advantages.
REFERENCE
The Historical Background of Crop Insurance - Before and After Independence
(PDF) Crop Insurance in India: Evolution, Issues and Way Forward
Crop Insurance Schemes
Pradhan Mantri Fasal Bima Yojana - Wikipedia
Pradhan Mantri Fasal Bima Yojana| National Portal of India
Pradhan Mantri Fasal Bima Yojna (PMFBY)
Weather Based Crop Insurance Scheme (WBCIS)| National Portal of India
Types & Role of Crop Insurance in Indian Agriculture
