Pradhan Mantri Fasal Bima Yojana 

The Union government launched PMFBY (Pradhan Mantri Fasal Bima Yojana). The major reason behind this is that changes such as occurrence of rainfall deficits on a  frequent basis, late beginning of rainfall as well as dry spells have underlined the significance of crop insurance for farmers. The Pradhan Mantri Fasal Bima Yojana aims to augment the production in agriculture. This is by giving the support to make sure that inclusive risk cover for farmer’s crops against all natural risks that are not preventable that take place from pre-sowing to the post-harvest phase. 

In 2016, the Pradhan Mantri Fasal Bima Yojana was launched and since then, farmers in large numbers have received advantages from the scheme. However, the central government has improvised the scheme and approved the revamping of the scheme. This is to make sure that the scheme is implemented in a more efficient as well as effective manner. 

Need for revamping the Pradhan Mantri Fasal Bima Yojana 

1. The Pradhan Mantri Fasal Bima Yojana has only been a voluntary scheme for the non-loanee farmers till now. In the situation of loanee farmers, banks are cutting their share of premium (2-5%) against loan accounts as a mandatory basis. However, farmers haven’t taken this in a good way as farmers said that companies are not in direct communication with them, nor do companies issue any policy certificates to them. The current scheme would ensure that insurance would be provided to the bank loans more than the farmer’s crops. 
2. Till now, no upper limit has been set for Central subsidy. This results in the unwillingness of insurers to include themselves within the scheme. 
3. Over the previous three to four seasons, there has been a large pendency of settlement of state subsidy to the insurance companies. This results in affecting the payment of claims on time. 

Pradhan Mantri Fasal Bima Yojana 2.0

1. The decision has been taken to make 100% enrollment voluntary for each farmer from the Kharif of 2020. The Pradhan Mantri Fasal Bima Yojana 2.0 makes sure that insurance companies need to put efforts to establish awareness among the farmers regarding the advantages of crop risk coverage. 
2. The decision has been made by the Cabinet to cap the premium subsidy of Centre for premium rates under the scheme. The premium rates are upto 30% for those crops or regions that are unirrigated and 25% for those crops or regions that are irrigated. 
3. The government has provided flexibility to the States or Union Territories. The major reason behind this is to implement the Pradhan Mantri Fasal Bima Yojana 2.0. The government also gives the states or Union Territories the choice of selecting any number of extra risks such as mid-season adversity, localized calamity as well as post-harvest losses. 

Challenges faced by the scheme 

1. The scheme has been transformed but there are some challenges also. One of the major challenges in smooth execution of the scheme is awareness generation. 
2. Apart from these changes, there are still more changes to be brought to bring behavioral change. These changes are related to the cost of insurance being a vital output and not an investment that is money-back. 

Conclusion 

The Union government launched PMFBY (Pradhan Mantri Fasal Bima Yojana). In 2016, the Pradhan Mantri Fasal Bima Yojana was launched and since then, farmers in large numbers have received advantages from the scheme. The major reason behind this is that changes such as occurrence of rainfall deficits on a  frequent basis, late beginning of rainfall as well as dry spells have underlined the significance of crop insurance for farmers. 

The Pradhan Mantri Fasal Bima Yojana aims to augment the production in agriculture. Over the previous three to four seasons, there has been a large pendency of settlement of state subsidy to the insurance companies. This results in affecting the payment of claims on time. One of the major challenges in smooth execution of the scheme is awareness generation. Apart from these changes, there are still more changes to be brought to bring behavioral change. These changes are related to the cost of insurance being a vital output and not an investment that is money-back.