PMFBY & RWBCIS Extended Until 2025-26 with ₹69,515 Crore Boost

What’s in today’s article?

• Why in News?
• Pradhan Mantri Fasal Bima Yojana (PMFBY)
• Key features of the PMFBY
• Restructured Weather-Based Crop Insurance Scheme
• Crop insurance scheme gets Rs 69,515 crore boost

Why in News?

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the continuation of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather-Based Crop Insurance Scheme until 2025-26. 

The schemes have been allocated an enhanced outlay of ₹69,515.71 crore for the period 2021-22 to 2025-26.

Pradhan Mantri Fasal Bima Yojana (PMFBY)

• About:
  • A scheme of the Ministry of Agriculture & Farmers Welfare, PMFBY is an insurance service for farmers for their yields, launched in 2016.
  • The new Crop Insurance Scheme is in line with the One Nation One Scheme theme.
  • The PMFBY replaced the previous two schemes: the National Agricultural Insurance Scheme (NAIS) and the Modified NAIS. 
  • It has incorporated the best features of all previous schemes while eliminating all previous shortcomings.
• Objectives:
  • 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 and diseases.
  • To stabilise the income of farmers to ensure their continuance in farming.
  • To encourage farmers to adopt innovative and modern agricultural practices.
  • To ensure flow of credit to the agriculture sector.

Key features of the PMFBY

• Premium rates
  • 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 (winter sown). 
  • In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%. 
• Area based approach
  • The Scheme will be implemented on an ‘Area Approach basis,’ i.e., Defined Areas for each notified crop for widespread calamities, 
  • The unit of insurance shall be Village/Village Panchayat level for major crops and for other crops it may be a unit of size above the level of Village/Village Panchayat.
  • It is assumed that all insured farmers in a unit of insurance, to be defined as a “Notified Area” for a crop, face similar risk exposures.
• No upper limit to subsidy
  • There is no upper limit on Government subsidy. This means, even if the balance premium is 90%, it will be borne by the Government.
• Use of technology
  • The use of technology will be encouraged to a great extent. For example, 
    • Smartphones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. 
    • Remote sensing will be used to reduce the number of crops cutting experiments.
• Beneficiaries to be covered
  • All farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.
  • To address the demand of farmers, the scheme has been made voluntary for all farmers from Kharif 2020.
    • Earlier, the enrolment was compulsory for farmers who possess a Crop Loan account or Kisan Credit Card (KCC) account, etc).

Restructured Weather-Based Crop Insurance Scheme (RWBCIS)

• RWBCIS was introduced by the Government of India in 2016 to safeguard farmers against financial losses caused by unfavourable weather conditions. 
• These conditions encompass factors such as rainfall, temperature, wind, and humidity.
• The scheme offers coverage for a range of crops, including food crops, oilseeds, and commercial or horticultural crops. 
• Its primary objective is to provide comprehensive insurance protection for various perils like drought, flood, cyclone, and hailstorm, thereby mitigating the impact of crop damage on farmers.
• Eligibility – All farmers, including sharecroppers and tenant farmers, growing notified crops in notified areas.

Crop insurance scheme gets Rs 69,515 crore boost

• Continuation of PMFBY and RWBCIS till 2025-26
  • The Union Cabinet approved the continuation of the PMFBY and the RWBCIS until 2025-26, with an enhanced outlay of ₹69,515.71 crore for the period 2021-22 to 2025-26.
• Risk Coverage and Technology Infusion
  • The schemes aim to provide risk coverage for crops against non-preventable natural calamities. 
  • To increase transparency and efficiency in claim calculation and settlement, the Cabinet approved the creation of the Fund for Innovation and Technology (FIAT) with a corpus of ₹824.77 crore.
• Technological Initiatives under FIAT
  • Yield Estimation System using Technology (YES-TECH):
    • Utilizes Remote Sensing Technology for yield estimation, with at least 30% weightage to technology-based estimates.
    • Currently implemented in 9 states, with efforts to onboard others.
    • Madhya Pradesh has adopted 100% technology-based yield estimation, eliminating the need for Crop Cutting Experiments.
• Weather Information and Network Data Systems (WINDS):
  • Plans to establish Automatic Weather Stations (AWS) at the block level and Automatic Rain Gauges (ARGs) at the Panchayat level.
  • Aims to increase network density fivefold for hyper-local weather data.
  • WINDS implementation starts in 2024-25, with states like Kerala, Uttar Pradesh, and Himachal Pradesh participating.
• Special Provisions for Northeastern States
  • The Centre will share 90% of the premium subsidy for Northeastern states.
  • Flexibility is provided to reallocate funds to other development projects if required due to low gross cropped area or voluntary participation.
• Key Benefits
  • Enhanced risk coverage for farmers across India.
  • Transition to technology-based systems for increased accuracy and transparency.
  • Support for Northeastern farmers with higher subsidy sharing.

Q.1. What are the key features of PMFBY?

PMFBY offers a uniform premium rate (2% for Kharif, 1.5% for Rabi, and 5% for horticulture crops), no upper limit on subsidies, and uses technology like remote sensing for crop yield estimation. Farmers growing notified crops in specified areas are eligible.

Q2. What is the role of FIAT in crop insurance schemes?

The ₹824.77 crore Fund for Innovation and Technology (FIAT) facilitates transparency in claim settlement using initiatives like YES-TECH for remote yield estimation and WINDS for hyper-local weather data, benefiting Indian farmers.

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Source: IE | PIB | Vikaspedia