West Bengal is likely to join the highly subsidised crop insurance scheme, which is run jointly by the Union and state governments, immediately after a new state government assumes office.
Reversing the Opt-Out
According to sources, discussions are underway to onboard the state, which had earlier opted out of the Pradhan Mantri Fasal Bima Yojana (PMFBY), starting next kharif season.
The Mamata Banerjee government had refused to join the scheme, citing factors including financial constraints. Currently, PMFBY is being implemented across 24 states and union territories.
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West Bengal is the biggest rice-producing state while it has a major share in the country’s fruit, vegetable, and tea production.
Financial Security
The crop insurance scheme provides 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, 2% for kharif crops, and 5% for cash crops. The premium subsidy is divided equally between the Centre and the state with the exception of north-eastern states where the premium is split in a 9:1 ratio between the Centre and states.
According to ministry data, over Rs 1.98 lakh crore has been paid to farmers under PMFBY as compensation since its launch in 2016, which was five times the total premiums of Rs 40,097 crore paid by them so far.
Since its launch in kharif, 2016, 27 states and union territories have implemented the scheme in several seasons. However, Bihar, Telangana, Andhra Pradesh, Jharkhand, West Bengal and Gujarat opted out of the scheme due to factors including financial constraints. However, Andhra Pradesh and Jharkhand have re-joined it. Gujarat currently implements its own Mukhyamantri Kisan Sahay Yojana, while Punjab in principle has given the nod for implementing PMFBY.
However, other states not currently implementing PMFBY include Bihar, Telangana, West Bengal, Punjab, Gujarat, Arunachal Pradesh, Nagaland, Delhi, Ladakh, Dadra and Nagar Haveli, and Daman & Diu. Meanwhile, the number of enrolled farmers has increased by 32%, from 3.17 crore in 2022-23 to 4.19 crore in 2024-25.
The Centre has incurred Rs 12,267 crore under PMFBY as per the revised estimate for FY26. As per the budget estimate, Rs 12,200 crore has been allocated for crop insurance for the current fiscal year. To reduce claim settlement delays, the agriculture ministry has made it mandatory for states to open escrow accounts to deposit their premium share in advance starting from the current kharif season (2025-26).
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According to a recent agriculture ministry statement in parliament, 86% of the 170 million farmers covered under the scheme during FY21–FY25 had small and marginal land holdings. Over 100 crops are notified for crop insurance, which covers incidents including inundation, landslide, cyclone, hailstorm, drought and post-harvest losses.
Currently, 20 insurance companies, both public and private sector—including Agriculture Insurance Company of India, National Insurance Company, Bajaj Allianz General Insurance and ICICI-Lombard—are implementing the scheme. According to an official, PMFBY is voluntary for the states and farmers while states are provided flexibility in major works such as selection of insurance companies through bidding, enrollment of farmers and assessment of crop yield or loss.
Keeping into consideration the risk appetite of states, they have the flexibility to choose models – cup and cap (80:110 & 60:130) and profit and loss sharing, where in case crop insurance claims fall below certain threshold, portion of the premium paid by the Government as subsidy goes back to the State treasury.
TOPICSCrop insuranceThis article was first uploaded on May eight, twenty twenty-six, at nine minutes past seven in the evening.