STATE AGRICULTRE MINISTERS’ CONFERENCE PRESENTATION ON REVAMPING PRADHAN MANTRI FASAL BIMA YOJANA JULY 08, 2019

Background of PMFBY Pan India scheme - implemented in 27 States and Union Territories Fixed contribution from farmers across the geographies 2% of sum insured for Summer crops, 1.5% of sum insured for Winter Crops, and 5% for commercial/ horticulture crops Remaining premium shared equally between Central and State Governments - (50-50) Entire crop cycle covered – pre sowing to post harvest Farmers availing KCC loans (loanee farmers) are compulsorily covered under the scheme, while non-loanee farmers apply for the scheme voluntarily Insurance unit reduced to village/village panchayat level for widespread calamity and individual farm for localized risks Sum insured equated to scale of finance to ensure entire investment of a farmer is covered. Clustering of districts for better operational viability

Where have we reached till now Sum Insured Crop Combinations Technology Insured Area Insured Area increased from 22% to 30% of Gross Cropped Area (GCA) Technological intervention in administration of the scheme – e.g. NCIP and CCE Agri app Voluntary coverage increased from 5% to 36% Number of crop combinations notified increased from 80 to 200 Voluntary Coverage Sum Insured increased from Rs 1.15 lakh crore to Rs 2.36 lakh crore (larger risk coverage for same crop)

Where have we reached till now Season Number of Farmers Insured (In Lakhs) Total Sum Insured Total Farmers Share in Premium Total Gross Premium Total Estimated Claims Total Claim Paid Total No. of Farmers against paid Claims (In Lakhs) (In Rs. Crore) Kharif 2016 405.55 1,31,842 2,913 16,047 10,557 10,555 108.17 Rabi 2016-17 172.98 72,781 1,311 5,971 6,013 5,926 38.87 2016-17 578.53 2,04,623 4,224 22,018 16,570 16,480 147.05 Kharif 2017 349.21 1,30,806 3,023 19,601 18,259 18,233 154.53 Rabi 2017-18 172.39 78,389 1,466 6,567 3,630 3,129 23.91 2017-18 521.60 2,09,196 4,490 26,168 21,889 21,362 178.45 Kharif 2018 348.36 1,40,261 3,238 21,012 14,813 9,799 97.92 Rabi 2018-19 213.62 96,052 1,700 8,604 611 231 5.36 2018-19 561.98 2,36,313 4,938 29,615 15,424 10,030 103.28 Kharif 2018 claims are not yet fully reported Rabi 2018-19 enrolment and claims statistics are provisional

Challenges & Proposed Solutions Crop Cutting Experiments – Challenges Large number of CCEs (70 lakh per year) within a short span of time is difficult to achieve. Shortage of manpower to conduct huge number of CCEs in a short harvesting window Manipulations during conduct of CCE - Non-adherence to CCE processes, disclosure of CCEs experimental plots in advance Limited use of CCE app for recording and sharing CCE yield data – (<15% of total CCEs conducted) Delay in approval of data on CCE App/sharing CCE yield data with Insurance Companies by State Government Schedule of CCEs not shared by State Government with Insurance Companies as per stipulated timelines Limited co-observance of CCEs by Insurance Companies Proposed Solutions 2-step process for assessment of yield based on preliminary weather-based indices followed by conduct of CCEs - By Sep 2020 Smart Sampling and CCE Optimization - By Sep 2020 Enhancement of National Crop Insurance Portal (NCIP) and Linking to Unified Farmer Database (consisting of digitized land records) - By Dec 2020 Auto approval of CCE yield data on CCE App/CCE co-observance App after cut-off date. In case of delay/deficiency in CCE data, usage of synthetic yield - By Kharif 2020 Direct Yield Estimation of All Major Crops - By Sep 2023

Challenges & Proposed Solutions Pricing and Insurance Companies related issues – Challenges Public perception that Insurance companies are making profit from the scheme Many district crop combinations having high premium rates leading to an increase in overall cost of PMFBY Proposed Solutions Improved Risk Management through creation of State-Level Corpus Fund or National-Level Risk Pool - By March 2020 Removal of High Premium Crops from the ambit of Crop Insurance - By Kharif 2020 Irrigated area within a crop in a district is more than 50% - Premium Ceiling for coverage under PMFBY at 25% Irrigated area within a crop in a district is less than 50% - Premium Ceiling for coverage under PMFBY at 30% Above limits to be revisited every year State-Specific Issues – Challenges Delay in sharing of subsidy by the states leading to delay in claims settlement to farmers Low investment by Insurance Companies in terms of accessibility and outreach due to short contract durations Repeated tendering process delays the overall implementation of crop insurance in States Deduction of overdue State Subsidy from Central Transfer to States - By Kharif 2020 Making multi-year tenders (minimum 3 years) mandatory for all States – By Kharif 2020

Challenges & Proposed Solutions Monitoring mechanism – Challenges Around 30 districts account for half of the overall claims across the nation Proposed Solutions Direct monitoring and increased engagement with identified “Focus Districts” - By Kharif 2020 North Eastern Region – Challenges Low penetration of the scheme in North Eastern region due to no provision of identifying individual beneficiaries within community owned lands Restructuring the entitlement of individual beneficiaries of community owned lands in NER in line with PM-KISAN - By Kharif 2020 Product Design – Challenges Compulsory enrolment on loanee farmers leads to dissent from farmers who do not wish to avail insurance or those who were enrolled without consent Inconsistency in yield data leads to high premium rates for some crops in certain districts Making Scheme Voluntary – Views from States have been requested, still awaited Migration of crops with inconsistent yield data to Weather-Based Insurance Scheme - By Kharif 2020

Name of the State: _________________________________________________ Decision Points: S.No. Decision Points Yes No Remarks 1 2-step process for assessment of yield   2 Smart Sampling and optimization of CCEs to rationalize the number of CCEs 3 Technology based claims settlement in case of delay in sharing of yield data/non–usage of CCE-agri app 4 Direct yield estimation of major crops using remote sensing 5 Migration to National-Level Insurance Risk Pool 6 Migration to State level Corpus Fund 7 Compulsory 3 Year Tendering in Crop Insurance 8 Removal of High Premium Crops from the ambit of Crop Insurance 9 Provision of Basic product available to all farmers with flexibility to States to provide add on products 10 In case of delay in sharing of state share of subsidy, deduction of overdue State Subsidy from Central Transfer to states 11 Making the scheme voluntary 12 Migration of crops with inconsistent yield data to Weather-Based Insurance Scheme Any Other Suggestions: 1. 2. Name:____________________________________________ Signature:___________________________________________

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