Recently, The Union Cabinet chaired by the Prime Minister approved continuation of the Pradhan Mantri Fasal Bima Yojana and Restructured Weather Based Crop Insurance Scheme till 2025-26 with an overall outlay of Rs.69,515.71 Crore from 2021-22 to 2025-26.
Fund for Innovation and Technology (FIAT)
- A separate Fund for Innovation and Technology (FIAT) with a corpus of ₹824.77 crore has been created.
- Purpose: To enable faster assessment of crop damage, quicker claim settlement, and reduction in disputes.
- FIAT will also focus on promoting digital enrolment of farmers, increasing coverage, and supporting research and development studies.
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Technology-Based Initiatives
- YES-TECH (Yield Estimation System using Technology):
- This system uses remote sensing technology for yield estimation with a minimum of 30% weightage given to technology-based estimates.
- Aim: To phase out traditional Crop Cutting Experiments (CCE) gradually.
- For the year 2023-24, claims were calculated and settled using YES-TECH.
- Nine major states currently implementing: Andhra Pradesh, Assam, Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu, and Karnataka.
- Madhya Pradesh has adopted 100% technology-based yield estimation.
- WINDS (Weather Information and Network Data Systems):
- Aim: To establish Automatic Weather Stations (AWS) at the block level and Automatic Rain Gauges (ARGs) at the panchayat level to improve hyper-local weather data collection.
- The initiative plans to expand the current weather data network density fivefold.
- Implementation has been deferred to 2024-25 (originally planned for 2023-24) to allow for preparatory work.
- Costs for data rental will be shared by the Centre and States.
- Nine states implementing WINDS: Kerala, Uttar Pradesh, Himachal Pradesh, Puducherry, Assam, Odisha, Karnataka, Uttarakhand, and Rajasthan.
About Pradhan Mantri Fasal Bima Yojana (PMFBY)
- Launch: Launched in 2016, A large-scale crop subsidy insurance scheme that was aimed to safeguard farmers.
- Umbrella scheme: PMFBY scheme was designed in line with the One Nation–One Scheme and replaces three older initiatives:
- Modified National Agricultural Insurance Scheme (MNAIS),
- Weather-based Crop Insurance Scheme and
- National Agricultural Insurance Scheme (NAIS).
- Objectives:
- To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & diseases.
- To stabilise the income of farmers to ensure their continuance in farming.
- To encourage farmers to adopt innovative and modern agricultural practices.
- To ensure flow of credit to the agriculture sector.
- Functioning:
- PMFBY insures farmers against all non-preventable natural risks from pre-sowing to post-harvest.
- Farmers have to pay a maximum of 2 per cent of the total premium of the insured amount for kharif crops, 1.5 per cent for rabi food crops and oilseeds as well as 5 per cent for commercial / horticultural crops.
- The balance premium is shared by the Union and state governments on a 50:50 basis and on a 90:10 basis in the case of northeastern states.
- Coverage:
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- Risks covered under the scheme: Risk of sowing, planting and germination failure, Risk of standing crop failure, Risk of post-harvest losses, Protection against calamities.
- Exclusions: Loss or damage to notified insured crops due to war, nuclear risks, malicious damage and other preventable risks is excluded from the scope of coverage.
- Coverage of Crops: Food crops (Cereals, Millets and Pulses), Oilseeds, Annual Commercial / Annual Horticultural crops.
About Restructured Weather Based Crop Insurance Scheme (RWBCIS)
- Launch: Launched by the central government in 2016.
- Administering Authority: Ministry of Agriculture & Farmers Welfare.
- Basis for Compensation: Weather triggers instead of actual crop yield.
- Objective of RWBCIS
- To mitigate the financial hardship of farmers by providing compensation for anticipated crop losses caused by adverse weather conditions.
- Weather parameters such as rainfall, temperature, wind, and humidity serve as proxies for crop yield in determining payouts.
- Coverage: Food crops (cereals, millets, pulses), oilseeds, and annual commercial/horticultural crops.
- Weather Risks Covered:
- Rainfall (deficit, excess, unseasonal, dry spells, rainy days).
- Temperature (high or low).
- Relative humidity.
- Wind speed.
- Hailstorms and cloudbursts.
- Implementation
- The scheme operates on an Area Approach wherein a Reference Weather Unit Area (RUA) determines weather parameters.
- Crop life cycle is divided into phases (sowing to maturity), and weather risks are assessed for each phase.
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Comparison Between RWBCIS and PMFBY
| Aspect |
RWBCIS |
PMFBY |
| Basis of Claims |
Weather parameters as proxies for crop yields. |
Yield-based, relying on Crop Cutting Experiments (CCEs). |
| Claim Settlement Speed |
Faster claim settlements due to real-time weather data. |
Delays in payouts due to dependence on CCEs and verification processes. |
| Coverage |
Weather-specific risks like rainfall, temperature, and humidity. |
Comprehensive coverage, including pests, diseases, and post-harvest losses. |
| Risk Focus |
Focuses on weather variability and its impact on crops. |
Covers broader agricultural risks, including yield and external damages. |
| Targeted Needs |
Suitable for farmers facing frequent weather fluctuations. |
Suitable for farmers needing broader risk protection across crop cycles. |
January 2, 2025
