Agriculture, Government of India, India, Stories

Part-2: Number of Farmers enrolling under PMFBY decreases over the years


In part-2 of this series on PMFBY, we look at the trend in season wise enrolments, outstanding claims among other things.


As is known widely,  agriculture is the primary sector of the Indian economy that contributes around 16% of the nation’s GDP. Also, agriculture and allied sectors together is the source of livelihood for 52% of the Indian population. It also is the primary source of income for the majority of the rural households. It is in this context that Crop insurance plays a major role in mitigating the losses incurred due to the vagaries of nature.

The NDA government launched the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2016 by combining the existing insurance schemes to help the farmers cope with crop failure. In an earlier story, we explained the scheme in detail. This story explores the trends in farmer enrolment, claims paid and claim ratio.

Insurance Coverage – From 405.5 lakh farmers in Kharif 2016 to 338.4 lakhs farmers in Kharif 2018

In Kharif 2016, when the PMFBY and RWBCIS were introduced, a total of 405.5 Lakhs farmers got insurance coverage. This number further came down to 350.2 lakhs in Kharif 2017 and 338.4 lakhs in Kharif 2018. It should be noted that enrolment in the scheme is mandatory for those farmers who have availed crop loans from a public financial institution. The following chart shows the number of farmers who have enrolled in PMFBY. The data reveals that the number of loanee farmers has decreased by 29.5%, from 289.2 lakhs in Kharif 2016 to 203.9 lakhs in Kharif 2018. Meanwhile, the number of non-loanee farmers, those who have the option of voluntary enrolment has increased from 101.3 lakhs in Kharif 2016 to 120.6 lakhs in Kharif 2018- an increase by 19%.

Pradhan Mantri Fasal Bima Yojana_Kharif Crop

Total number of farmers who have enrolled in PMFBY has increased in case of Rabi

In the case of Rabi crop season, the total number of farmers who have enrolled in the flagship scheme has gone up every year. From 169.5 lakhs in 2016-17 to 175.3 lakhs in 2017-18 to a high of 216.4 lakhs in 2018-19, the enrolment in the scheme has increased by 27.6% since inception of PMFBY. It can be seen that while the enrolment of loanee farmers went up by 5% in 2017-18, the number of non-loanee farmers who enrolled under PMFBY went down by 2.6% in the same period. However, for 2018-19 Rabi season, the number of non-loanee farmers enrolled has increased by 159% compared to the previous year while the number of loanee farmers has further come down by 8.6%. Overall, both in the case of Kharif & Rabi, the enrolment of loanee farmers has come down over the last 3 years.

Pradhan Mantri Fasal Bima Yojana_Rabi Crop

Non-loanee farmers’ enrolment in RWBCIS has witnessed an increase of 50%

In the case of RWBCIS, the enrolment of all farmers has plummeted over the years for Kharif crops despite the increasing enrolment of non-loanee farmers by 50%, 1.2 lakh in 2018 as compared to 0.8 lakh farmers in 2016. This is in contrast to the enrolment pattern observed in the case of Rabi crops. In the case of Rabi crops, the total number of enrolled farmers has increased from 5.6 lakh in 2016-17 to 5.7 lakh in the following year and to 7.1 lakhs in 2018-19 resulting in a total increase by 27%. While the number of loanee farmers enrolled under RWBCIS has remained the same in Rabi 2017-18 and 2018-19, the number of non-loanee farmers who enrolled themselves has witnessed an increase of 350%.

Pradhan Mantri Fasal Bima Yojana_RWBCIS

More farmers are borrowing money from non-institutional sources

From the data thus far, it is clear that more and more non-loanee farmers are availing the scheme compared to the loanee farmers who must compulsorily enrol themselves in the scheme. This can also mean that more farmers are opting out of financial institutions to borrow money and instead are borrowing from other sources such as moneylenders. What discourages the farmers from availing loans from financial institutions could be the ability to repay in case of one bad season. Financial institutions like the public sector banks usually do not give fresh loans if there is an outstanding amount.

Gross premium is increasing irrespective of the number of farmers

From the data, it is evident that the gross premium is increasing despite a decrease in the number of enrolled farmers. Gross premium is the total premium paid by farmers, state and central governments. While in the case of Kharif crops, the number of farmers enrolling has dropped from 405 lakhs to 338 lakhs in three years, the premium amount has increased from Rs. 16,026 crores in 2016 to Rs. 20,663 crores in 2018. In other words, the number of farmers enrolled has fallen by 17% while the gross premium has increased by 29%. The area of land insured for Kharif crops has also dwindled during the same period- from 383.4 lakh hectares in 2016 to 340.8 Lakh hectares in 2017 and to further 315.1 lakh hectares in Kharif 2018.

Pradhan Mantri Fasal Bima Yojana_Gross premium paid under PMFBY and RWBCIS

How much do the Insurance companies pay in settlement of claims?

Pradhan Mantri Fasal Bima Yojana_Trend in claim ratio

Claim ratio is calculated as the ratio of estimated claim to gross premium paid. It can also be understood as the percentage of gross premium that is being claimed. In other words, this is the amount paid in settlement for every 100 rupees of premium collected. For Kharif crops, the percentage was 66% in 2016 which went up to 94% in 2017 and again has come down to 74% in 2018. In the case of Rabi crops, in 2016-17, the claim ratio was as high as 102% which fell to 66% in 2017-18 and is at 16% in 2018-19.

Pradhan Mantri Fasal Bima Yojana_Estimated claims

Claims are not being settled on time

26% of the estimated claims for Kharif 2018 and 52.5% of estimated claim for Rabi 2018-19 were pending as of August this year. Claims worth Rs. 445 crores are still pending from Rabi 2017-18. This shows that the claims are not being settled on a timely basis. The data clearly shows that the delay in the disbursement of claims is still persistent. Even the governments are delaying the payment of their share of premium which is affecting the farmers.

The data compiled is through a response to an RTI is up to 05 August 2019, and hence, the data for Rabi 2018-19 is provisional.

Featured Image: Pradhan Mantri Fasal Bima Yojana


About Author

A bachelor’s degree in mathematics and master’s in social science, she is driven by ardent desire to work with this unique combination to create her own path instead of following the herd. Having served a stint as the college union chairperson, she is a strategist who is also passionate about nature conservation, art and loves solving Sudoku.