Since 1985, the government experimented with and implemented multiple crop insurance schemes. Over the years, crop insurance in India has grown significantly, both in scale and impact. So far, farmers have received ₹2.08 lakh crore in claims across all crop insurance schemes. Maharashtra, Rajasthan, and Madhya Pradesh together account for ₹1.06 lakh crore—half of all insurance claims ever paid.
Farming is a gamble against nature, with risks looming at every stage—from unpredictable weather during production to price fluctuations after harvest. To shield farmers from these uncertainties, India has steadily evolved its crop insurance framework. The journey began with the National Agricultural Insurance Scheme (NAIS) in 1999, followed by a series of pilot programs that led to the National Crop Insurance Programme (NCIP) in 2013. Building on these efforts, the government introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather-Based Crop Insurance Scheme (RWBCIS) in 2016, marking a major shift in agricultural risk management. Unlike its predecessors, PMFBY covers losses from sowing to post-harvest, offers uniform and affordable premiums, leverages technology for quick claims processing, and ensures transparency through a unified digital portal. Meanwhile, RWBCIS provides coverage based on weather conditions like temperature, rainfall, and humidity, helping farmers mitigate climate-related risks more effectively.
In today’s story, we trace the origins of crop insurance in India and explore key statistics and trends related to PMFBY. This serves as an update to our earlier coverage of PMFBY, which you can revisit here, here, here, and here.
Crop Insurance Schemes in India
For years, crop insurance in India was more of an experiment than a reliable safety net for farmers. Until 1985, various small-scale schemes were tested in different regions, but none were implemented on a national scale. That changed with the launch of the Comprehensive Crop Insurance Scheme (CCIS)—India’s first countrywide initiative to protect farmers from losses. It ran for nearly 15 years, but challenges remained. To bridge the gaps, new schemes were introduced, including insurance for farmers without bank loans, coverage for certified seeds, and even a scheme to secure farmers’ incomes.
By 1999, the government realized CCIS needed an upgrade. The National Agricultural Insurance Scheme (NAIS) was introduced to fix the issues faced earlier. However, NAIS also ran into problems- claim payments were delayed, and there were frequent discrepancies in insured crop areas and yield estimates. To address this, the government launched the Modified NAIS (MNAIS) in 2010-11 on a pilot basis across 50 districts. Around the same time, insurance companies started testing weather-based crop insurance, which officially became part of the government’s insurance program in 2007-08.
In 2013, India took another step forward with the National Crop Insurance Programme (NCIP), which brought together three schemes: MNAIS, Weather-Based Crop Insurance (WBCIS), and Coconut Palm Insurance (CPIS). It was meant to replace NAIS completely from the Rabi 2013-14 season. However, some states pushed back, arguing they needed more time. In response, the government allowed 14 states to continue NAIS for one last season before it was finally retired.
Over the years, India’s crop insurance system has constantly evolved to address farmers’ needs. While the journey has been far from perfect, every step has brought India closer to providing farmers with a stronger and more reliable insurance safety net.
₹2.08 Lakh Crore in Crop Insurance claims paid to farmers under all Crop Insurance Schemes
For nearly three decades, India has been refining its crop insurance system, but financial sustainability has always been a challenge. The Comprehensive Crop Insurance Scheme (CCIS) ran for 14.5 years (29 seasons) from 1985-86 to Kharif 1999, but its structure made it unviable. Farmers were insured for a total of ₹24,975 crore. While the premium collected was just ₹403.5 crore, the claims paid amounted to ₹2,319 crore—almost six times the premium collected. In 27 out of 29 seasons, payouts exceeded the premiums, making the scheme financially unsustainable.
The National Agricultural Insurance Scheme (NAIS), launched in 1999, was an attempt to fix these flaws. It operated for 14 years (Rabi 1999-00 to Kharif 2013) and expanded coverage significantly. Under NAIS, the insured amount was ₹2,83,720 crore, with ₹8,458 crore collected as premiums and ₹27,961 crore paid in claims. While 54 million farmers benefited from the scheme, it continued to struggle with high claim payouts. The Modified NAIS (MNAIS), introduced as a pilot between Kharif 2011 and Rabi 2012-13, paid ₹777.5 crore in claims.
Meanwhile, private insurance companies introduced the Weather-Based Crop Insurance Scheme (WBCIS) in Kharif in 2007, offering an alternative to yield-based insurance. Unlike previous schemes, this model was more financially sustainable—while ₹7,519 crore was collected in premiums, the claims paid stood at ₹5,286 crore.
With the launch of Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured WBCIS (RWBCIS) in 2016, crop insurance underwent a major shift. Claims are processed automatically based on government-provided yield data and transferred directly to farmers’ bank accounts through the Digi Claim module on the National Crop Insurance Portal (NCIP). For large-scale losses, farmers don’t even need to report damages, while localized disasters like hailstorms, floods, and post-harvest losses due to cyclones are assessed individually by a joint team of state officials and insurers.
Five public-sector and 17 private insurance companies implement PMFBY, selected through a transparent bidding process. Since its launch, ₹1.72 lakh crore has been paid out in claims, with the total premium collection standing at ₹2.56 lakh crore. Altogether, across all crop insurance schemes, ₹2.08 lakh crore has been disbursed to farmers.
Under PMFBY, claims peaked at ₹29,445 crore in 2018-19, but have since declined, with ₹18,211 crore paid in 2022-23 and ₹15,504 crore in 2023-24. Some payments remain stuck due to banking delays, disputes over yield data, and pending state government contributions.
Madhya Pradesh, Maharashtra & Rajasthan receive over half of Total Crop Insurance payouts
Over the years, crop insurance in India has grown significantly, both in scale and impact. So far, farmers have received ₹2.08 lakh crore in claims across all crop insurance schemes. However, a large share of these payouts has been concentrated in just a few states. Maharashtra, Rajasthan, and Madhya Pradesh together account for ₹1.06 lakh crore—half of all insurance claims ever paid. If we add Karnataka, Tamil Nadu, Gujarat, and Andhra Pradesh, the total reaches ₹1.63 lakh crore, making up more than three-fourths of all claim payouts under various schemes.
While PMFBY has had a wide reach, its impact has been uneven across regions. As per the 2023-24 annual report of the Department of Agriculture and Farmers’ Welfare, the scheme is currently active in 22 States/UTs. Over the past seven years, 27 States/UTs have implemented it at least once, except for Punjab, which has never opted in.
The pattern of claim distribution under PMFBY is similar to overall trends. Maharashtra, Madhya Pradesh, and Rajasthan alone account for over half of all claims, receiving a total of ₹96,877 crore. Adding Karnataka and Tamil Nadu takes the total to ₹1,25,339 crore, which is nearly 75% of all payouts since PMFBY’s launch. Maharashtra leads the pack with ₹38,233 crore, followed by Madhya Pradesh (₹30,198 crore) and Rajasthan (₹28,444 crore). Tamil Nadu and Karnataka have received ₹14,741 crore and ₹13,720 crore, respectively.
The seasonal trend in payouts is also evident. According to the PMFBY dashboard, nearly 72% of all claims have been paid for Kharif season crops, while the rest cover Rabi season losses. The claim ratio under PMFBY, which compares claims paid to the premium collected, peaked at 99.5% in 2018-19, while fluctuating at 77.5% in 2016-17, 90% in 2017-18, 86.5% in 2019-20, 67.6% in 2020-21, and 68.7% in 2021-22.
These numbers point to regional disparities in the implementation and impact of all crop insurance schemes, including PMFBY.
