Pradhan Mantri Fasal Bima Yojana Provides Comprehensive Crop Insurance to Farmers at Highly Subsidized Premium Rates

1. At a Glance

• PMFBY is the Government of India's flagship crop insurance scheme, launched 2016, providing comprehensive risk cover from pre-sowing to post-harvest at highly subsidised premium [2][3].
• Replaced earlier NAIS and MNAIS schemes; administered by the Ministry of Agriculture & Farmers Welfare [1][3].
• UPSC relevance: intersects agriculture, rural distress, fiscal federalism, climate risk, and use of remote-sensing tech in governance.

2. Why in the News

• PIB release dated 10 March 2026 reiterated the scheme's subsidised premium structure and Centre-State cost-sharing ratios, including the 90:10 sharing for North-Eastern and Himalayan States [1].
• Continuing rollout of YES-TECH and WINDS technological modules under the 2024 Cabinet-approved modifications [4][5].

3. Background & Evolution

• 18 February 2016: launched by PM at Sehore, Madhya Pradesh; effective from Kharif 2016 [2].
• Replaced National Agricultural Insurance Scheme (NAIS) and Modified NAIS (MNAIS) [2].
• 2020 Revamp: made enrolment voluntary for loanee farmers; added cover for wildlife attack [5].
• Kharif 2020: 90:10 Centre-State funding extended to North-Eastern States [1].
• Kharif 2023: 90:10 sharing extended to Himalayan States [1].
• 2024 Cabinet: approved continuation with technology infusion — YES-TECH, WINDS, DigiClaim, CCE-Agri-App [4].

4. Core Static Facts

• Type: Central Sector Scheme (100% Central earlier, now cost-shared with States).
• Ministry: Agriculture & Farmers Welfare; Dept. of Agriculture & Farmers Welfare (DA&FW) [2].
• Farmer Premium Caps (max % of sum insured) [1][2]:
• Kharif food/oilseed crops: 2%
• Rabi food/oilseed crops: 1.5%

• Annual commercial/horticultural crops: 5%

• Balance actuarial premium: shared by Centre & State 50:50 (general States); 90:10 for NE States (Kharif 2020 onwards) and Himalayan States (Kharif 2023 onwards) [1].

• Risks covered: all non-preventable natural risks — drought, flood, pest, disease, hailstorm, landslide, cloudburst, fire, post-harvest losses (up to 14 days) [2].
• Crops: food crops (cereals, millets, pulses), oilseeds, annual commercial/horticultural crops [2].
• No cap on Government subsidy share since 2020 revamp; states opting out include Andhra Pradesh, Telangana, Bihar, West Bengal, Jharkhand, Gujarat (varying years).

5. Multi-Dimensional Analysis

Economic

• Cushions farm-income volatility; covers ~30% of Gross Cropped Area (up from 23% pre-PMFBY) [2].
• Reduces distress sale and rural indebtedness; mitigates NPA risk in agri-credit.

Administrative / Federal

• States free to choose insurer via bidding; voluntary for loanee farmers post-2020 [5].
• Several major States have opted out, citing high state premium subsidy outgo — exposes federal friction.

Scientific / Technological

• YES-TECH: Remote-sensing-based yield estimation with ≥30% weightage to tech-based yield; rolled out in 9 States — AP, Assam, Haryana, UP, MP, Maharashtra, Odisha, TN, Karnataka [4].
• WINDS: Automatic Weather Stations at block level; Automatic Rain Gauges at panchayat level — hyper-local weather data [4].
• DigiClaim, CCE-Agri-App, National Crop Insurance Portal (NCIP) — digital backbone.

Environmental / Climate

• Acts as climate-risk transfer mechanism amid rising frequency of droughts, unseasonal rains, cyclones.

Social

• Targets small & marginal farmers (86% of holdings); voluntary nature post-2020 raised concerns about adverse selection.

6. Recent Developments (last 12-18 months)

• 2024: Cabinet approved continuation of PMFBY & RWBCIS up to 2025-26 with enhanced tech allocation [4].
• Kharif 2023 onwards: Himalayan States moved to 90:10 sharing [1].
• 2024–25: Rollout of YES-TECH manual after piloting in 100 districts [4].
• March 2026 PIB: reaffirmation of premium caps and subsidy structure [1].

7. Prelims Hooks

• PMFBY launched on 18 February 2016 at Sehore, MP [2].
• Replaced NAIS and MNAIS [2].
• Max farmer premium: 2% Kharif, 1.5% Rabi, 5% commercial/horticultural [1].
• Centre-State premium share: 50:50 generally; 90:10 for NE & Himalayan States [1].
• NE States moved to 90:10 from Kharif 2020; Himalayan States from Kharif 2023 [1].
• Implementing Ministry: Agriculture & Farmers Welfare (not Finance, not Rural Dev) [2].
• YES-TECH assigns minimum 30% weightage to remote-sensing-based yield estimates [4].
• WINDS = Weather Information Network Data Systems — AWS at block, ARG at panchayat level [4].
• 2020 revamp made scheme voluntary for loanee farmers and added wildlife attack cover [5].
• Covers losses pre-sowing to post-harvest (post-harvest cover for 14 days) [2].
• Non-loanee farmer coverage jumped from 14.88 lakh (Kharif 2015) to 102.6 lakh (Kharif 2016) [2].
• Coverage rose to ~30% of Gross Cropped Area from 23% under pre-PMFBY schemes [2].

8. Mains Relevance

• GS Paper III — Agriculture: "Issues related to direct and indirect farm subsidies and minimum support prices" and "Major crops, cropping patterns... e-technology in aid of farmers".
• GS Paper II — Government policies and welfare schemes; centre-state relations.
• Plausible stems: 1. "PMFBY has the right architecture but weak uptake. Examine the reasons for States opting out and suggest reforms." 2. "Discuss the role of remote-sensing and weather-data technologies (YES-TECH, WINDS) in improving the credibility of India's crop insurance regime." 3. "Evaluate PMFBY as an instrument of climate-risk transfer for Indian agriculture."

9. Related Topics to Study Next

• Restructured Weather Based Crop Insurance Scheme (RWBCIS) — parallel scheme based on weather parameters [4].
• PM-KISAN — direct income support; complements insurance.
• Kisan Credit Card (KCC) — credit linkage; PMFBY auto-covers KCC loanees (now voluntary).
• MSP and Procurement Policy — risk management ecosystem.
• National Mission on Sustainable Agriculture (NMSA) — climate resilience.
• Agri-Stack & Digital Agriculture Mission — backbone for DigiClaim.
• Doubling Farmers' Income (Ashok Dalwai Committee) — risk-mitigation context.
• Insurance Regulatory and Development Authority (IRDAI) — regulates the implementing insurers.

10. Common Errors / Trap Areas

• Premium %: confusing 2%/1.5%/5% caps — Kharif is HIGHER (2%) than Rabi (1.5%); commercial is 5%.
• Year of NE 90:10 share: Kharif 2020, NOT 2016 or 2018 [1].
• Himalayan States 90:10: started Kharif 2023, often confused with NE timing [1].
• Ministry: Agriculture & Farmers Welfare, not Finance/IRDAI (IRDAI only regulates insurers).
• Voluntary vs Compulsory: Post-2020 revamp, PMFBY is voluntary even for loanee farmers — earlier it was compulsory for them [5].
• Launch site: Sehore, MP — not Delhi.