PMFBY will provide a comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers and encourage them for adoption of innovative practices.
The Scheme can cover all Food & Oilseeds crops and Annual Commercial/Horticultural Crops for which past yield data is available and for which requisite number of Crop Cutting Experiments (CCEs) will be conducted being a part of the General Crop Estimation Survey (GCES).
The scheme is compulsory for loanee farmer obtaining Crop Loan /KCC account for notified crops. However, voluntary for Other/non loanee farmers who have insurable interest in the insured crop(s).
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.
The difference between premium and the rate of Insurance charges payable by farmers shall be shared equally by the Centre and State.
The seasonality discipline shall be same for loanee and non-loanee farmers. The scheme will be implemented by Agricultural Insurance Company of India Ltd (AIC) and other empanelled private general insurance companies. Selection of Implementing Agency (IA) will be done by the concerned State Government through bidding.
The existing State Level Co-ordination Committee on Crop Insurance (SLCCCI), Sub-Committee to SLCCCI, District Level Monitoring Committee (DLMC) shall be responsible for proper management of the Scheme.
The Scheme shall be implemented on an ‘Area Approach basis‘. The unit of insurance shall be Village/Village Panchayat level for major crops and for other crops it may be a unit of size above the level of Village/Village Panchayat.
The Loss assessment for crop losses due to non-preventable natural risks will be on Area approach.
In case of majority of insured crops of a notified area are prevented from sowing/planting the insured crops due to adverse weather conditions that will be eligible for indemnity claims upto maximum of 25% of the sum-insured.
However losses due to localised perils (Hailstorm, landslide & inundation) and Post-Harvest losses due to specified perils, (Cyclone/Cyclonic rain & Unseasonal rains) shall be assessed at the affected insured field of the individual insured farmer.
Three levels of Indemnity, viz., 70%, 80% and 90% corresponding to crop Risk in the areas shall be available for all crops.
There will be a provision of on account claims in case of adverse seasonal conditions during crop season viz. floods, prolonged dry spells, severe drought, and unseasonal rains.
On account payment upto 25% of likely claims will be provided, if the expected yield during the season is likely to be less than 50% of normal yield. . The claim amount will be credited electronically to the individual Insured Bank Account.