AGRICULTURAL CROP INSURANCE POLICY IN INDIA: A STUDY OF PRADHAN

MANTRI FASAL BIMA YOJANA IN HIMACHAL PRADESH.

Presentation of research Proposal

 Introduction
 In India agriculture is an insti ncti vely risky venture due to uncertainty in producti on and in the context of increased
climati c aberrati ons and globalizati on.
 Therefore, there is a great need for crop insurance to provide economic support and help in stabilize the income to
farmers. So that in case of crop loss they can claim compensati on as a matt er of right
In india the fi rst crop insurance scheme The Individual Indemnity-Based Experimental Crop Insurance Scheme was introduced in
the year 1972 in six states Gujarat, Tamil Nadu, West Bengal, Maharashtra, Andhra Pradesh, and Karnataka. Which the premium rate was
highest at nearly 10 per cent only 3110 farmers insured their crops for a premium of 4.54 lakh against a claim of 38 lakh during the year
1972-78 in this scheme the insurance coverage is very low.
 Pilot Crop Insurance Scheme (PCIS) was introduced in 1979. Which is the premium rate was nearly 10 per cent. Under this scheme 6 lakh
farmers insured their crops for a premium of 195 lakh against a claim of 156 lakh during the year 1979-84.
Later, in 1985 another crop insurance scheme was implemented a comprehensive crop insurance scheme whose
implementati on was ti ll kharif 1999.which were 7.6 crores farmers covered their crops with the total sum insured was
25000 crores and the claim paid beings 2300 crores.
Under the National Agricultural Insurance Scheme. The premium rate was 3.5 percent for bajra and oilseeds, 2.5 percent for other Kharif
crops, and two per cent for Rabi crops which 27 lakh farmers have insured their crops for a premium of 4.67 lakh against claim of 56 crore
during the year 1999-2016 .
Pradhan Mantri Fasal Bima Yojana the premium rate was fixed at 2 per cent for Kharif Crops, less than 2 percent for Rabi crops and 5 per
cent for Horticulture crops which 1617lakh farmers have insured their crops for a premium of 60 lakh against a claim of 52 crores during
the year 2016-2018.
 List of(s)
Author Literature Reviews:
Area Of Study & Data Source Major Findings
The study was based on primary •The yield loss due to the incidence of
data collected during January – droughts was a maximum 50 per cent in
Kumar et, al. (2011) March 2009 through the interview bananas and least 23 per cent in cotton.
•Satisfaction of farmers is very low nearly
method from interviewing 600 50 per cent farmers are not satisfied.
farmers expansion over 27 districts • In which from 77 per cent farmers are
out of 32 districts of the Tamil Nadu not satisfied with the claim procedure and
state. 23 per cent farmers are not satisfied from
crops covered.
•Whereas 30 per cent farmers are satisfied
from crop insurance.

Mahul et, al. (2012 The study of this paper was based on Under the NAIS more than 22
secondary source Agricultural millions farmer covered from crop
Insurance Corporation of India (AICI). losses and more than 3 million
The study analyzed to both farmers are covered their crops
programs National Agriculture under the WBCIS.
Insurance Scheme (NAIS) and Under the NAIS 25 per cent million
Weather Based Crop Insurance farmers are insured and 95 per cent
Scheme(WBCIS) in India during the farmers are not insured.
year 2010.
 The study was carried out the farmers • 90 farmer household covered their
awareness of the various type of crop crops under the NAIS 30 farmer
Mani et, al. (2012) insurance. The study was based on both households from each districts.
primary and secondary data were •Whereas 30 farmer households covered
collected from 120 farmer households. under the WBCIS.
That was the sample selected by the •Which is highest in the Nagapattinam
purposive sampling method in the district at 18 per cent followed by
Nagapattinam district while randomly Thiruvarur at 17 per cent and Thanjavur
selected from the Vellore and Madurai 11 per cent. Whereas 320 farmers were
districts of Tamil Nadu during the year covered under WBCIS during 2005-06
2005-06. with 61 lakhs of the sum insured and a
premium of 5 lakhs.

The study was based on secondary data •The percentage of non-loanees is higher
collected from the office of the regional compared to NAIS, which was only 3 per
Swain (2014) office of the Agricultural Insurance cent and 1 per cent respectively during
Company of India, Bhubaneswar. During the Kharif and Rabi Seasons in 2009 and
this study examined the performance of 2010.
NAIS & WBCIS in Odisha during the year •The percentages of farmers benefited
2008-10. under the NAIS were 9 percent in 2008
and 19 percent in 2010.
• In case of WBCIS was 19 per cent and
100 per cent in 2008 that is shows that
the percentage of benefits of WBCIS is
also more than NAIS
Devi & Gupta (2020) The study carried out on the •The awareness of farmers
awareness regarding the maximum 67per cent farmers
Pradhan Mantri Fasal Bima are aware about this
Yojana. The study was based scheme.
on primary data collected •Fifty-two per cent of
from randomly selected farmers were aware about
farmer households in the the crops covered under
Fatehpur district of Uttar PMFBY.
Pradesh during the year •Farmers were least aware
2019-2020. about the fact that PMFBY
was given for Kharif crops
since 2016.

Aditya et, al. (2018) studied to know the factors that •Most of the farmers suffer from crop
influence farmers' adoption decision of losses their proportion is more than 25
crop insurance and to analyze the per cent in most crops and despite it,
impact of insurance on farmers’ income the insurance coverage is less than 5 per
expenses of production and investment cent in both seasons Kharif and Rabi.
in agriculture. The study was based on
secondary data conducted by National
Sample Survey Office (NSSO) in 2012-
2013.
 ulati et, al. the implementation of various agricultural insurance •Penetration of agriculture insurance maximum
2018) schemes in India since 1985. The work of this paper 55 million farmers are crops covered under the
focuses on evaluating the performance of these PFBY in which 16 million farmers in the Rabi
insurance schemes such as the National Agriculture season and 39 million farmers in the Kharif
Insurance Scheme (NAIS), Modified National Agriculture season and least 8 million farmers are crops
Insurance Scheme (MNAIS) and Weather Based Crop covered under the MNAIS.
Insurance Scheme (WBCIS with a particular focus on the •While 20 million farmers are crops covered
existing crop insurance scheme Pradhan Mantri Fasal under the NAIS.
Bima Yojana (PMFBY) for Kharif 2016 and Rabi 2016-17. •Under the PMFBY the premium rate is very low
The study was based on secondary data collected from that is fixed at 2 per cent for Kharif food grains
Agriculture statistics at a glance and industry data and 1.5 per cent for Rabi food grains. While in
horticulture and cotton crops it was fixed up to
per cent.

ditya et, al. The study was based on primary data collected from •The premium for existing crop
020) stratified sampling frame randomly selected 716 wheat insurance products averages INR 390
farmers in 12 districts of Punjab during 2015-16. In which per acre but willingness to pay of the
the sample were collected from 2-3 blocks from each
districts. farmers is lower than the premium
because they would to pay for crop
insurance INR 271per acre.
•If the farmer wants to insure 100 per
cent of the threshold value of their
crops.
Duhan (2017) The farmers’ perception •Most of the farmers 89 per
towards crop insurance cent farmers believe that
scheme and to provide the crop insurance should
suggestions to improve be not compulsory for all
knowledge and awareness farmers and nearly 50 per
among farmers for joining cent farmer said they have
and paying for crop no idea about the crop
insurance in Haryana. The insurance.
study was based on primary •More than 80 per cent
data collected from farmers think that premium
randomly selected farmers for their crop insurance
567 households from over should fully paid by the
all in the Haryana state. government.

Punia et, al. (2021) The Study was based on •The performance of PMFBY in different
secondary data which was states 4.2 millions farmers and 3.76
collected from various sources millions hectare area were insured
under PMFBY during kharif 2016.
such as Ministry of Agriculture •Similarly 3.47 millions farmers and
and Farmers Welfare, 3.40 millions hectare area were insured
Government of India, during kharif 2017. During Kharif 2016-
Department of Agriculture and 2017 the premium paid was highest in
Cooperation and Farmers Maharashtra.
Welfare and so on • In PMFBY the overall claim ratios was
very low less than 1per cent from
indicting collected premium was higher
Srinivasulu (2015) The study was based on a •Under the PMFBY the premium paid by
secondary source of data. farmers had been reduced to 2 per cent
Data will be collected from the insured value for the more rain-
dependent Kharif season and 1.5 per ce
District Central Co-operative for the Rabi season, compared with 3-8
Banks, Gramin Banks Primary percent charged for the two earlier
Agricultural Cooperative schemes National Agricultural Insurance
Societies, and so on. During Scheme (NAIS) and Modified National
the year 2016-17 Agricultural Insurance Scheme (MNAIS).
In the case of horticultural crops, farmer
premium burden will be 5 per cent of th
sum assured or 50 per cent of the total
premium.

Kumar & Sharma. (2022) the study purpose to evaluate the •They found that the performanc
performance of the modernization of Uttar Pradesh and West Benga
Weather Based Crop Insurance was very poor less than one per
Scheme (WBCIS) In India with the cent.
help of secondary data that was •whereas Maharashtra was the
collected from the reports of leading performer nearly 39
agriculture insurance company percent farmers were insured in
ltd. (AIC) from the implementation the state under WBCIS followed b
of Kharif and Rabi seasons during Andhra Pradesh 15 percent and
the year 2016- 2020. Telangana 12 per cent and so on.
Kaur & Thakur The growth and performance of •They found that Rajasthan was the leading
(2019) crop insurance schemes in the performing state whose 97 per cent farmers
north-western states of India. insured their crops.
•Haryana was the lowest performer of the
Under the Weather-Based Crop north-western states of India whose less than 1
Insurance Scheme (WBCIS) and percent farmers have insured their crops under
Pradhan Mantri Fasal Bima Yojana the WBCIS.
(PMFBY). The study was based on •Whereas the Himachal Pradesh was the lowest
secondary data. performer in northwestern states of India
whose nearly 38 lakh farmers were insured their
crops

Kaur et, al. (2021) examined various features of different •The premium rate was 3.5 percent for bajra
crop insurance policies in India during and oilseeds, 2.5 percent for other Kharif crops,
the year 1972. And to analyze the and two per cent for Rabi crops which 27 lakh
farmers have insured their crops for a premium
impact of Pradhan Mantri Fasal Bima of 4.67 lakh against claim of 56 crore during the
Yojana (PMFBY) on farmers during the year 1999-2016 followed By Pradhan Mantri
year 2017-19. The study was based on Fasal Bima Yojana the premium rate was fixed at
secondary data 2 per cent for Kharif Crops, less than 2 percent
for Rabi crops and 5 per cent for Horticulture
crops which 1617lakh farmers have insured
their crops for a premium of 60 lakh against a
claim of 52 crores during the year 2016-2018.
 Summary
The awareness the concept of crop insurance regarding various risks involved in agriculture in Tamil Nadu 65 per cent
farmers awarded from risk mitigation.
 Nearly 50 per cent farmers are not satisfied from crop insurance out of which 77 per cent farmers are not satisfied
from the claim procedure and 23 per cent farmers are not satisfied from crops covered.
 The performance of various crop insurance schemes in india. Rajasthan was leading performer states whose 97 per
cent farmers were insured their crops followed by Maharashtra and Andhra Pradesh was 25 percent , Telangana 12
percent and so on .While the performance of West Bengal, Haryana and Himachal Pradesh is very low less than 2 per
cent.
The premium rate was very high in the modified national agriculture insurance scheme and weather based crop
insurance scheme more than 10 per cent .
 The issue of premium rate was solved under the Pradhan Mantri fasal Bima Yojana . Which is the premium rate did
fixed at 2 per cent for Kharif food grains and 1.5 percent for Rabi food grains as well as 5 per cent on horticulture and
cotton crops in both season Kharif and Rabi.
 The overall percentage of insured from crop losses in various crop insurance scheme was more than 50 per cent.

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 Objectives
On the basis of review of literature objectives are followings:
• To encourage the farmers' for adoption of crop insurance regarding various risks involved in
agrarian farming.
• To know the impact of various crop insurance schemes on farmers expenses of production
and investment in agriculture.
• To study the performance of various crop insurance schemes in india .
• To provide information regarding various crop insurance plan to the farmers in india
•To evaluate the performance of the modernization of crop insurance in india
Research Questions:
• How to encourage the farmers for higher adoption or implementation of various crop
insurance plan in india.?
• what is the importance of crop insurance?
• How to give the information about the crop insurance to the farmers?

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Thank You