In a bid to improve the agricultural sector of India, this scheme was launched to ensure farmers’ welfare in 2016, however keeping in mind the current pandemic at play & the looming crisis which climate change will bring to the agricultural sector in the near future, the government has taken steps to revamp the flagship scheme i.e PMFBY 2.0 in order to ensure speedy redresssal to farmers.



PMFBY aims to support production in agriculture by providing support to ensure inclusive risk cover for crops of farmers against all non-preventable natural risks from pre-sowing to the post-harvest stage. The scheme has completed four years and has been implemented in several states & UTs.


  • Indian agriculture has progressively acquired a ‘small farm’ character. The total number of operational holdings in the country increased significantly over the years & such small average holdings do not allow for surpluses that can financially sustain families & thus the need for crop insurance becomes a necessity for such farmers in the event of crop failure.
  • Another reason why crop insurance serves as an effective tool to deal with the problem of crop is that commercialization of agriculture also leads to an increase in credit needs but most small/marginal farmers cannot avail credit from formal institutions due to complicated procedures & paper work, thus they most often fall trap to informal credit sources where they are charged with exorbitant interest rates. This situation pushes the famer into enormous debt traps which become a bone of contention in case of crop failure as they have no means to return the amount borrowed. This increases incidences of farmers’s suicide.
  • Further this coupled with higher incidence of extreme weather events such as floods, droughts, forest fire aggravates agrarian distress. This particular aspect is bound to worsen amidst increase in climate change. Thus a lack of preparedness among farmers leaves them vulnerable to harvest losses which in turn lead to fluctuations in their income. Hence the need for crop insurance proves as an effective combatant against such vulnerabilities.


  • Lackadaisical implementation is the biggest challenges with respect to any government scheme/agricultural policy, as it render farmers highly vulnerable. This can be attributed to misappropriation of funds, red tapism, and indifferent bureaucracy.
  • Further states choose to voluntarily implement the PMFBY; it is their responsibility to notify crops. However this is another hurdle as it is unclear how states should choose the major crops during a season for different districts, this result in the exclusion from insurance coverage of farmers who grow non-notified crops.
  • State governments also use their discretionary powers to decide how much land will be insured & sum insured, to reduce their burden of subsidy premiums. Thus, farmers often find it pointless to buy the insurance if the sum insured is less than their cost of cultivation.
  • Also recently according to a report, PMFBY has seen a sharp drop in the number of farmers covered & sums insured in the current kharif cropping season compared to 2019 statistics. This can be attributed higher premium subsidy, which is to be borne by the state government; and crop insurance being made optional.
  • Leasing agricultural land is prohibited in many states while some have conditions on who can lease out land, which prevents many tenant farmers from buying insurance in the first place.

Way Forward:-

  • Strengthening the capacity of state governments by increasing funds for rural infrastructure & incentivizing the development + use of technology is the need of the hour.
  • There should be strict compliance with timelines for claim settlement to ensure adequate & timely compensation to farmers.
  • It is also crucial to increase the penetration of crop insurance & thus mandatory awareness programmes on the benefits of crop insurance must be made available to farmers on a large scale.

For Prelims:-

  • The scheme covers loanee farmers (those who have taken a loan), non-loanee farmers (on a voluntary basis), tenant farmers, and sharecroppers.
  • The PMFBY operates on an area approach. Thus, all farmers in a particular area must pay the same premium and have the same claim payments.
  • WBCIS (Weather Based Crop Insurance Scheme) aims 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.
  • Pradhan Mantri Krishi Sinchai Yojana (PMKSY) was launched with the motto of ‘Har Khet Ko Paani’ for providing end-to end solutions in irrigation supply chain, viz. water sources, distribution network and farm level applications.
  • Paramparagat Krishi Vikas Yojana is implemented with a view to promote organic farming in the country. To improve soil health and organic matter content and increase net income of the farmer so as to realize premium prices.
  • National Agriculture Market (e-NAM) provides e-marketing platform at national level and support creation of infrastructure to enable e-marketing. It brings in transparency and competition to enable farmers to get improved remuneration for their produce moving towards ‘One Nation One Market’. 
  • NMSA (National Mission for Sustainable Agriculture) is one of the eight Missions under National Action Plan on Climate Change (NAPCC). It aims at promoting Sustainable Agriculture through climate change adaptation measures, enhancing agriculture productivity especially in rainfed areas focusing on integrated farming, soil health management, and synergizing resource conservation.

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