- Why in news
- On 29 August 2026, PIB issued a explainer on PMFBY. It cites ₹12,200 crore for 2026–27, over ₹2.06 lakh crore in claims in ten years, and West Bengal rejoining from Kharif 2026.
- What it is
- PMFBY is the central crop insurance scheme launched on 18 February 2016. It insures farmers against yield loss and specified localised and post-harvest risks at low farmer premium rates. Premium above the farmer share is subsidised by the Centre and states.
- Prevented sowing
- Insured farmers prevented from sowing by adverse weather can claim up to 25% of the sum insured.
- Post-harvest cover
- Crops in cut-and-spread condition for drying in the field are covered for up to 14 days after harvest against specified cyclonic and unseasonal rain events.
- YES-TECH
- It uses remote sensing for crop yield estimates. It was launched for paddy and wheat in Kharif 2023.
- RWBCIS
- The Restructured Weather-Based Crop Insurance Scheme pays on weather parameters as a proxy for crop damage, not assessed yield loss.
- Farmer premium cap
- Farmers pay at most 2% of sum insured for Kharif, 1.5% for Rabi and 5% for commercial/horticultural crops.
- Subsidy sharing
- The balance of the actuarial premium is shared 50:50 by Centre and states. North Eastern States (from Kharif 2020) and Himalayan States (from Kharif 2023) share it 90:10.
- Alternate Risk Transfer models
- Besides standard PMFBY, there are three models: cup and cap (80:110), cup and cap (60:130), and profit and loss sharing. States may choose any one.
- Crops and stages covered
- Cover runs from pre-sowing to post-harvest for food crops, oilseeds and annual commercial horticultural crops notified by the state.
- Clustering of districts
- States group districts so each cluster mixes different risk profiles. This lowers expected sum insured and bidded premium.
- Wild animal cover
- Wild animal losses were not covered earlier as they are preventable. States can now notify them on individual assessment as an add-on at state cost.
- Inundation
- Inundation cover is available for all notified crops. For paddy, jute, mesta and sugarcane it is excluded for localised claims.
- Operational Guidelines revised
- The guidelines were comprehensively revised in 2018, 2020 and 2023.
- Late-claim penalty
- A 12% penalty on insurers for delayed claim payment is auto-calculated on NCIP.
- Escrow account
- States must open an escrow account to deposit their premium share in advance, mandatory from Kharif 2025.
Don’t confuse with PMFBY vs RWBCIS: PMFBY pays on area-based assessed yield loss, plus localised and post-harvest cover. RWBCIS pays on weather index triggers, mainly for fruit, vegetable and plantation crops.
Don’t confuse with YES-TECH vs WINDS: YES-TECH estimates yields by remote sensing. WINDS gathers hyperlocal weather data through automatic weather stations and rain gauges.
Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.
Why it matters
- Gives farmers an income safety net against weather, pest and disease shocks, and helps loan repayment and next-season investment.
- Technology tools such as NCIP, DigiClaim and YES-TECH aim at faster and more transparent claim settlement.
- Voluntary non-loanee enrolment, about 50% on average over ten years, shows wider acceptance.
- Gives farmers low-cost insurance against crop loss and income shocks.
- Wide coverage: about 78.7 crore cumulative applications since 2016-17.
- Add-on cover for wild animal damage helps farmers near forests, where human-wildlife conflict hits crops.
Problems
- States have opted out or run their own schemes, and enrolment swings with state premium subsidies, as in Andhra Pradesh and Maharashtra.
- Accurate yield estimation and land-record validation remain hard, which can delay or reduce claims.
- Add-on exclusions and the exclusion of preventable or man-made losses limit the cover.
- High state-level cost burden and delays in state subsidy release.
- Insurers' bidding and claim settlement vary widely across states.
- Delays in state subsidy share, late proposals by banks and yield data disputes delay claims.
Way forward
- Expand technology-based yield estimation and land-record integration to more crops and states.
- Raise awareness and doorstep enrolment of non-loanee, tenant and sharecropper farmers.
- Keep grievance redressal strong and settle claims on time.
- Use clustering and risk-transfer models to keep premiums sustainable.
- Speed up claim payment with timely data and technology.
- Use remote sensing, CCE-Agri App and hyper-local weather data to make yield estimates objective and cut disputes.
Put in your answer
Ten-year claims record: From Kharif 2016 to Rabi 2025-26, over 92.46 crore farmer applications were insured and claims exceeded ₹2.06 lakh crore.
States rejoining: Andhra Pradesh, Jharkhand and West Bengal rejoined, and Bihar will return from Rabi 2026–27.
Budget 2026-27: The Union Budget 2026–27 allocated ₹12,200 crore to PMFBY.
Digiclaim module: Links NCIP with PFMS and insurers' accounting systems for transparent claim processing.
Delinking of subsidy: Central share is delinked from state share so farmers get proportionate claims on the Centre's share.
- 2016Mains GS3 · Q10Need for crop insurance and salient features of PMFBY
- 2017Mains GS3 · Q15Significance of crop insurance for small and marginal farmers
- 2001Prelims Q40Year National Agriculture Insurance Scheme replaced Comprehensive Crop Insurance Scheme
- 2016Prelims Q21PMFBY premium rates and coverage of post-harvest losses from cyclones
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Single answer
Ours, not from a UPSC paper
Consider the following statements about the Pradhan Mantri Fasal Bima Yojana (PMFBY): 1. Farmers pay a maximum premium of 2% for Kharif foodgrain and oilseed crops. 2. For farmers in North-Eastern and Himalayan States/UTs, the Centre and state subsidy on premium is shared 50:50. 3. Insured farmers prevented from sowing by adverse weather can claim up to a maximum of 25% of the sum insured. 4. Crops in cut-and-spread condition are covered against specified cyclonic and unseasonal rain for up to 30 days after harvest. 5. The Restructured Weather-Based Crop Insurance Scheme pays claims on the basis of actual assessed crop-yield losses. Which of the statements given above are correct?
Which of the statements given above are correct?
True or false?
1 of 14
Statements the way Prelims prints them. Say first, then see the fact.
1.Under PMFBY, the maximum farmer premium for Kharif foodgrain and oilseed crops is 2% of the sum insured.
True. Maximum 2% for Kharif foodgrain and oilseed crops.
2.Insured farmers prevented from sowing by adverse weather can claim up to 25% of the sum insured.
True. Prevented sowing claims are capped at 25% of the sum insured.
3.Under PMFBY, premiums of loanee farmers are automatically deducted from the loan amount by banks.
True. Banks deduct premium from active, standard crop loans or KCCs.
4.The Restructured Weather-Based Crop Insurance Scheme pays claims on the basis of actual assessed crop-yield losses.
False. It pays on weather parameters as a proxy for damage.
5.Under PMFBY, the maximum farmer premium is 2% of sum insured for Kharif crops and 1.5% for Rabi crops.
True. Kharif 2%, Rabi 1.5%, commercial/horticultural 5%.
6.For North Eastern States, the balance premium is shared between Centre and State in the ratio 90:10.
True. 90:10 applies to NE States from Kharif 2020 and Himalayan States from Kharif 2023.
7.In all states, the premium subsidy is borne entirely by the Central Government.
False. It is shared 50:50 by Centre and State, except 90:10 in NE and Himalayan States.
8.States may choose among alternate risk transfer models such as cup and cap and profit and loss sharing instead of the standard PMFBY.
True. Three alternate models exist and states choose one.
9.PMFBY was launched in 2016 and covers post-harvest losses among its risks.
True. Launched 18 February 2016; covers yield loss, localised and post-harvest risks.
10.Under PMFBY, states can notify crop losses caused by wild animals as an add-on cover at the cost of the State Government.
True. Wild animal add-on is allowed at state cost, on individual assessment.
11.Inundation cover under PMFBY is available for all notified crops without any exception.
False. For paddy, jute, mesta and sugarcane it is not available for localised claims.
12.A penalty of 12% on insurance companies for delayed claim payment is auto-calculated on the National Crop Insurance Portal.
True. The 12% penalty is auto-calculated on NCIP.
13.YES-TECH mandatorily assigns 30% weightage to technology-derived yield estimation for paddy and wheat from Kharif 2023.
True. 30% weightage from Kharif 2023 for paddy and wheat; soybean added in Kharif 2024.
14.PMFBY was launched in 2016 and covers non-preventable natural risks from pre-sowing to post-harvest.
True. Introduced from 2016-17, covering pre-sowing to post-harvest non-preventable natural risks.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
15 marks · 250 words
Pradhan Mantri Fasal Bima Yojana completed ten years in 2026, with claims of over ₹2.06 lakh crore paid, and states such as West Bengal and Bihar returning to it. Examine the main provisions of the scheme and discuss the challenges in making it an effective risk cover for Indian farmers.
Worth revising until Prelims 2028: most news questions come within two years of the event.