Subject: Economy

India's agricultural sector, employing over 40% of the workforce, faces significant vulnerabilities due to climate uncertainties and natural calamities. The recent monsoon variations, with 94% of long-period average rainfall in 2023 and uneven distribution patterns, highlight the critical need for a robust crop insurance framework to protect farmers' interests.

Need for Crop Insurance in Indian Agriculture

• Climate Vulnerability: Frequent occurrences of droughts, floods, and extreme weather events pose significant risks to crop yields and farmer incomes.

• Financial Security: Crop insurance provides a safety net for farmers against production risks, ensuring income stability and preventing distress sales.

• Credit Access: Insurance coverage helps farmers secure institutional credit and promotes investment in modern agricultural practices.

• Risk Management: Enables farmers to adopt new technologies and high-yielding varieties without fear of complete loss.

Salient Features of PMFBY

• Premium Structure:

  • Farmers pay only 2% premium for Kharif crops.
  • 1.5% for Rabi crops.
  • 5% for commercial/horticultural crops.

• Coverage and Reach:

  • Over 40 million farmers enrolled as of March 2024.
  • 27% increase in enrollment from previous fiscal year.
  • Total claims of ₹1.56 trillion paid against farmer premiums of ₹31,139 crore since 2016.

• Implementation Framework:

  • Use of technology for crop cutting experiments.
  • Satellite imagery for damage assessment.
  • Integration with PM-KISAN database for better targeting.

• Budget Allocation:

  • ₹15,864 crore revised estimate for 2024-25.
  • ₹12,242 crore budget estimate for 2025-26.

Challenges and Way Forward

• Implementation Issues:

  • Delayed claim settlements.
  • Low awareness among farmers.
  • Regional disparities in coverage.

• Suggested Improvements:

  • Strengthen grievance redressal mechanism.
  • Enhance use of technology for faster claim processing.
  • Increase awareness through extensive outreach programs.

The success of PMFBY in providing ₹1.56 trillion in claim settlements demonstrates its crucial role in agricultural risk management. However, continuous improvements in implementation and technology integration are essential to make it more farmer-friendly and efficient, ultimately contributing to the goal of doubling farmers' income.