Scheme Features

Objective of the Scheme

• PMFBY aims at providing financial support to the farmers suffering from crop losses or damages arising out of unforeseen events.
• To stabilize the income of farmers to ensure their continuance in farming.
• To encourage farmers to adopt innovative and modern agricultural practices.
• It ensuring flow of credit to the agriculture sector

I. The scheme provides Insurance coverage to all Farmers for their crops as notified by the State Governments

All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage.

• Farmers should have insurable interest for the notified/ insured crops.
• The Scheme has been made voluntary for all the farmers including the Loanee farmers
• All farmers who have taken seasonal agricultural operation loans i.e Loanee from any Financial Institution (Co-operative banks, Regional Rural banks, Commercial banks, Private Banks etc.) for the notified crop and who have not opted out from scheme 7 days prior to cut off date, will be eligible for enrollment under the scheme by their financial institutions.Then bank / CSC/ Intermediary will be enrolled the farmers on National Crop Insurance Portal(NCIP) of Govt of India on www.pmfby.gov.in within cut off date
• The non-loanee farmers are required to submit necessary documentary evidence of land records prevailing in the State (Records of Right (RoR),Land possession Certificate (LPC) etc.) and/ or applicable contract/agreement details/ other documents notified/ permitted by concerned State Government (in case of sharecroppers/ tenant farmers).
• The Non-Loanee farmers and cultivators desirous of availing insurance under PMFBY scheme for any notified crop in any notified insurance unit may approach nearest bank branch/ PACS/ authorized channel partner/ insurance intermediary of insurance company within cut-off date, fill-up proposal form completely in prescribed format, submit form and deposit requisite premium to bank branch/ Insurance Intermediary / CSC Centers along with necessary documentary evidenceregarding his insurable interest in cultivating land/ crop (e.g.ownership/ tenancy/ cultivation rights) proposed for insurance
  • The farmer desiring for coverage should open/operate an account in the branch of the designated bank, and the details should beprovided in the proposal form.
  • The farmers should mention their land identification number in the Proposal and must provide documentary evidence with regard to possession of cultivable land.The cultivator must furnish area sown confirmation certificate.
  • The farmer should ensure that he gets insurance coverage for anotified crop(s) cultivated/proposed to be cultivated, in a piece ofland from a single source only. No duplicate or double Insurance is allowed and in any such cases farmer will not be eligible for coverage. The insurance company shall reserve the right to repudiate all such claims and not refund the premium as well in such cases.
  • Company may also take legal action against such farmers.
  • Any change in crop plan should be brought to the notice of the bank at least 2 days before cut-off-date.
  • Insurance Proposals are accepted only upto a stipulated cut-off date as declared by the SLCCC/ state Government Notified.

II. Crops Covered

All crops are covered under the scheme such as Food& Oilseeds crops and Annual Commercial/Horticultural Crops for which past yield data is available. In addition for perennial crops, pilots for coverage can be taken for those perennial horticultural crops for which standard methodology for yield estimation is available.

III. Coverage of Risks and Exclusions under the scheme
The Scheme operates on the principle of “Area Approach” in the selected Defined Areas which are called Insurance Unit (IU) , basis Crops and Defined Areas in accordance with decision taken in the State level coordination committees on crop insurance of the respective State/UT Government . These units are notified as insurance unit applicable to Village/Village Panchayat or any other equivalent unit for major crops. For other all other crops it may be a unit of size above the level of Village / village Panchayat.
Following stages of the crop and risks leading to crop loss are coveredunder the scheme.

a. Prevented Sowing/ Planting Risk: In case of majority of insured crops of a notified area are prevented from sowing/planting due to adverse weather conditions such as deficit rainfall or adverse seasonal conditions, the insured crops that will be eligible for indemnity claims upto maximum of 25% of the sum-insured.
b. Standing Crop (Sowing to Harvesting): Comprehensive riskinsurance is provided to cover yield losses due to non- preventable risks, viz. Drought, Dry spells, Flood, Inundation, Pests and Diseases, Landslides, Natural Fire and Lightening, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane and Tornado.
c. Post-Harvest Losses: coverage is available only up to a maximumperiod of two weeks from harvesting for those crops which are allowed to dry in cut and spread condition in the field after harvesting against specific perils of hailstorm, cyclone and cyclonic rains and unseasonal rains.
For the claims arising out of crop damage due to post-harvest losses and localized risks, arising out of cyclone or cyclonic rains / unseasonal rains throughout the country, resulting in damage to harvested crop lying in the field in ‘cut and spread’ condition for sole purpose of drying only , upto a maximum period of two weeks (14days) from harvesting is also covered and the assessment of damage will be made on individual farm basis.
d. Localized Calamities: Loss/ damage resulting from occurrence ofidentified localized risks of hailstorm, landslide, Inundation, cloud burst and natural fire due to lightening affecting isolated farms in the notified area

Note: Losses arising out of war and nuclear risks, malicious damage and other preventable risks shall be excluded.

IV. Indemnity Level applicable for different crops

Coverage is provided upto different indemnity levels of 70%, 80% and 90% corresponding to high, moderate and low risk level, respectively, of the areas basis the type of crops and is notified for crops and areas as per notified unit applicable.

V. Premium

The Maximum Premium payable by the farmers will be 2% for all Kharif Food & Oilseeds crops, 1.5% for Rabi Food & Oilseeds crops and 5% for Annual Commercial/Horticultural Crops or actuarial premium rate whichever is less. The difference between premium and the rate of Insurance charges payable by farmers shall be shared equally by the Centre and State.

• Note: The seasonality discipline shall be applicable for loanee and non-loanee farmers as defined in the State Government notification and farmers need to necessarily enroll before the specified cut off dates applicable for the respective crop in the season.
  
• The Threshold Yield (TY) shall be the benchmark yield level at which Insurance protection shall be given to all the insured farmers in an Insurance Unit.
  
• The Average Yield of a notified crop in Insurance Unit (IU) will be average yield of best five years out of last seven years. The Threshold yield of the notified crop is equal to Average Yield multiplied by Indemnity level.
  

VI. Basis of Claims Settlements
The claims payout would be made, basis the Area Approach, subject to the following:

1. a. State has to conduct requisite number of Crop Cutting Experiments (CCEs) at the level of notified insurance unit area and the CCE based yield data will be submitted to insurance company within the prescrib
2. b. Crop Cutting Experiments (CCE) shall be undertaken per unit area /per crop, on a sliding scale, as prescribed under the scheme outline and operational guidelines.
3. c. Modern Technology solutions like Smart Sampling Technique (SST) , use of GPRS enabled mobile smart phones to verify the integrity of CCEs and loss assessment by GOI app and upload the real time data on NCIP portal, GOI.
4. d. Decrease in dependence on CCEs and more reliance on technology for crop loss estimation
5. e. CCEs will lead to more scientific and transparent method for estimating crop losses.
6. f. State/ UT should facilitate strengthening of automatic weather station network for the purpose of on account payment settlement and use of proxy indicators
7. g. The Threshold Yield (TY) shall be the benchmark yield level at which Insurance protection shall be given to all the insured farmers in an Insurance Unit Threshold of the notified crop will be. The Average Yield of a notified crop in Insurance Unit (IU) will be average yield of best five years out of last seven years. The Threshold yield of the notified crop is equal to Average Yield multiplied by Indemnity level

IMPORTANT NOTE:

1. Farmers can enroll under the scheme via their bank branches, nearest CSC Centers or insurance intermediary as authorized by IRDA.

2. All enrolments need to necessarily be completed within the cutoff date as defined in the respective State Government notification and farmer share of premium duly remitted by the Bank or Intermediary within the cut off date to the Insurance Company.

3. In case the farmer changes the crop to be sown, he should intimate thechange to insurance company, at least 2 working days prior to cut-off-date for buying insurance or sowing either through financial institution/ channel partner/insurance intermediary/ directly; as the case may be, along with differencein premium payable, if any, accompanied by sowing certificate issued byconcerned village/ sub-district level official of the State. In case thepremium paid was higher, insurance company will refund the excess.

4. In case of Tenant/ share farmers obtaining coverage necessary documentaryevidence of land records prevailing in the State (Records of Right (RoR) Land possession Certificate (LPC) etc.) and/ or applicable contract/agreement details/ other documents notified/ permitted by concerned State Government should be provided at the time of enrollment.

5. Service Tax is exempted for this scheme.