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

2. 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

3. 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)

4. 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
172.98
72,781
1,311
5,971
6,013
5,926
38.87
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
172.39
78,389
1,466
6,567
3,630
3,129
23.91
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
213.62
96,052
1,700
8,604
611
231
5.36
561.98
2,36,313
4,938
29,615
15,424
10,030
103.28
Kharif 2018 claims are not yet fully reported
Rabi enrolment and claims statistics are provisional

5. 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

6. 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
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

7. 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

8. 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:___________________________________________

9. THANK YOU