Ensuring timely compensation
Additionally, insurance companies providing crop cover have been asked to pay all eligible claims within timelines.
Surplus rainfall since last month across parts of northwest India and continuation of showers this month have caused losses to kharif crops – paddy, pulses, cotton and sugarcane – in many states, especially Maharashtra, Punjab and Rajasthan.
The Rajasthan government has recently announced that farmers covered under the crop insurance scheme will be compensated if damage occurs within fourteen days of harvesting. Punjab has not joined PMFBY despites making announcements.
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PMFBY provides comprehensive risk coverage from pre-sowing to post-harvest stages of crops, where farmers pay a fixed premium of just 1.5% of the sum insured for rabi crops and 2% for kharif crops, while it is 5% for cash crops.
The balance premium is equally shared between the Centre and states 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 1.86 lakh crore has been paid to farmers under PMFBY since its launch in 2016 as compensation of which was five times of the total premiums of Rs 35,887 crore paid by them so far.
To reduce delays in claim settlement, the ministry has made it mandatory for states to open escrow accounts for deposit of their premium share in advance from the current kharif season (2025-26).
Meanwhile, the number of farmers enrolled has increased from 3.17 crore in 2022-23 to 4.19 crore in 2024-25, an increase of 32%.
Currently crop insurance is being implemented across 23 states and union territories. In terms of premium payment, the Centre, states and farmers have had a share of 40%, 48% and 12% respectively since the launch of the scheme.
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Meanwhile, Mizoram will be joining the PMFBY, the 24th states and union territories to implement the scheme.
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 for factors including financial constraints. However, Andhra Pradesh and Jharkhand have re-joined it.
Over 100 crops notified the crop insurance covers incidents including inundation, landslide, cyclone, hailstorm, drought and post-harvest losses.
Currently fourteen out of the 20 empanelled insurance companies, both in the public and private sector are implementing the scheme. The centre has incurred Rs 15,864 crore under PMFBY as per the revised estimate of FY25.