What is the status of agriculture insurance in India?

In April 2016, the government implemented the Pradhan Mantri Fasal Bima Yojana (PMFBY) and restructured the existing weather-based crop insurance scheme. The two schemes plan to cover 50 per cent of cropped year by 2019. They currently cover 30 per cent of the cropped area and are implemented in 21 states. In this chapter, we look at the performance of PMFBY.

Under the scheme, the government allowed 11 non-life insurance companies to cover farmers in the states. The scheme is mandatory all farmers who avail loan for crops. The assessment of yield losses suffered/likely to be suffered by farmers depend on the outcome of crop cutting experiments which are undertaken by the respective state government.

A nominal portion of the premium is paid by the farmer and the remaining amount is shared equally by the Centre and the state government. A farmer pays 1.5 per cent of the premium for Rabi, 2 per cent for Kharif and 5 per cent for horticultural crops and vegetables.