The Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched in 2016 to provide comprehensive insurance coverage to farmers against crop loss due to non-preventable natural risks.

The scheme aims to:

• Provide financial support to farmers suffering crop loss/damage arising out of unforeseen events
• Stabilize the income of farmers to ensure their continuance in farming
• Encourage farmers to adopt innovative and modern agricultural practices
• Ensure flow of credit to the agriculture sector

Coverage under PMFBY:

• Yield Losses (standing crops): Comprehensive risk insurance for crop cycle from sowing to harvesting against preventable risks like drought, dry spells, flood, inundation, pests and diseases, landslides, natural fire, lightning, storm, hailstorm, cyclone, typhoon, tempest, hurricane, tornado
• Post-Harvest Losses: Coverage for up to two weeks from harvesting against specific perils like cyclone, cyclonic rains, and unseasonal rains
• Localized Calamities: Loss/damage to notified crops due to hailstorm, landslide, and inundation affecting isolated farms

Premium rates under PMFBY are capped at:

• 2% for Kharif crops
• 1.5% for Rabi crops
• 5% for annual commercial and horticultural crops

The difference between the actuarial premium rate and the rate of insurance payable by farmers is shared equally by the Central and State Governments.