To reduce delays in claim settlement under the Pradhan Mantri Fasal Bima Yojana (PMFBY), the government has made it mandatory for states to open escrow accounts for payment of their share of fund on time from the next kharif season (2025-26).
For ensuring robust crop yield assessment, the agriculture ministry has asked states to ensure at least 50% weightage is given to yield derived by Yes-Tech, a technology-based crop yield estimates system.
Sources told FE such measures were necessitated by reports of delays in claims settlement under the scheme because of states’ inability to pay their share of funds on time and delay in updating data on the dedicated portal.
“We are trying to strengthen PMFBY as there are reports that claim assessments are not carried out properly and crop cutting experiments to ascertain yield are not perfect,” agriculture minister Shivraj Singh Chouhan had told FE.
Sources said currently states give up to 30% weightage to yield estimation system based on technology (Yes-Tech) and the rest is assigned to manual crop cutting experiments assessing crop yields.
While Madhya Pradesh has adopted Yes-Tech replacing manual yield estimates, other states implementing crop insurance schemes have been urged to reduce the dependence on manual systems gradually.
In a conference to review PMFBY in April this year, Devesh Chaturvedi, secretary, department of agriculture, had said delays in settlement of compensation to farmers for crop losses are dre due to many states’ failure to allocate funds on time.
Sources said since the launch of the scheme nine years ago, claims settlement default by states has been around Rs 4,440 crore.
There is also discussion to fix the dates for payment of compensation under crop insurance in line with the PM– Kisan scheme, where Rs 6000/year is transferred to 90 million farmers in three equal instalments.
A record 41 million farmers of the country’s 140 million farmers were enrolled under PMFBY in 2024-25 while 61.7 million hectare were covered. Out of the total enrolled farmers, 21.8 million were non-loanee and 18.4 million farmers took loans from the banks.
Currently crop insurance is being implemented across 23 states and union territories. In terms of premium payment, the Centre, states and farmers have had a share of 40%, 48% and 12% respectively since the launch of the scheme.
Over Rs 1.78 lakh crore has been paid to farmers under PMFBY between its 2016 launch and FY24 as compensation which was five times of total premiums of Rs 35,666 crore paid by them under the scheme.
“For every Rs 100 of premium paid by the farmers, they have received nearly Rs 500 as claims,” according to an official note.
The bulk of the financial burden of the insurance cover is borne by the state and central government.
Under PMFBY aims at providing comprehensive risk coverage from pre-sowing to post-harvest stages of crops, farmers pay a fixed premium of just 1.5% of the sum insured for rabi crops and 2% for kharif crops, while it is 5% for cash crops.
The balance premium is equally shared between the Centre and states with the exception of north-eastern states where the premium is split in a 9:1 ratio between the Centre and states.
Over 100 crops notified the crop insurance covers incidents including inundation, landslide, cyclone, hailstorm, drought and post-harvest losses.
Currently fourteen out of the 20 empanelled insurance companies, both in the public and private sector are implementing the scheme. The centre has incurred Rs 15,864 crore under PMFBY as per the revised estimate of FY25.