PMFBY (Pradhan Mantri Fasal Bima Yojana)

What is PMFBY?

Pradhan Mantri Fasal Bima Yojana (PMFBY) is the Government of India's main crop insurance scheme. It compensates farmers when notified crops in a notified area suffer losses from non-preventable natural risks, from before sowing to after harvest. Farmers pay a small, capped share of the premium and the Centre and the States pay the rest as subsidy. The scheme was launched in the Kharif 2016 season and is run by the Ministry of Agriculture and Farmers Welfare through empanelled general insurers, including the public sector Agriculture Insurance Company of India.

According to the IRDAI Annual Report 2024-25, PMFBY accounts for over 90 per cent of crop insurance business in India. Its companion scheme, the Restructured Weather Based Crop Insurance Scheme (RWBCIS), pays on weather indices instead of measured yields.

How PMFBY works

Risks covered. Prevented or failed sowing because of adverse weather; yield loss of standing crops from drought, flood, pests and disease, and similar perils; localised calamities such as hailstorm, landslide, cloudburst and natural fire affecting individual farms; and post-harvest losses from cyclone and unseasonal rain for crops left to dry in the field.

Changes in effect for Kharif 2026. The Ministry announced in November 2025 that crop loss from wild animal attacks becomes the fifth add-on cover under the localised risk category, with States notifying the animals and vulnerable areas, and that paddy inundation is reinstated as a localised calamity. Farmers must report such losses within 72 hours through the Crop Insurance App with geotagged photographs.

Recent operational reforms. States can choose risk-sharing models with insurers (profit sharing, or cup and cap at 60:130 or 80:110). Premium subsidies move through an escrow account and all payments run through the National Crop Insurance Portal. Yield estimation increasingly uses YES-TECH, weather data from WINDS and crop photos through CROPIC. Ministers have stated that insurers delaying claim payments owe 12 per cent interest to farmers, and that from Kharif 2025 States delaying their subsidy share also face a 12 per cent penalty.

In January 2025 the Union Cabinet approved continuation of PMFBY and RWBCIS up to 2025-26 with a total outlay of ₹69,515.71 crore for 2021-22 to 2025-26, and created a Fund for Innovation and Technology of ₹824.77 crore. The scheme continues to operate for the 2026 seasons.

Key numbers

A February 2025 Lok Sabha answer stated that from 2016-17 to 2023-24, farmers paid ₹32,475 crore in premium and received ₹1,72,138 crore in claims, about five times their contribution. IRDAI data show crop insurance claims paid of about ₹19,562 crore in 2024-25 across public, private and specialised insurers.

What PMFBY means for distribution

• The channel is institutional. Most enrolment happens through banks (for loanee farmers), Common Service Centres, the National Crop Insurance Portal and insurers' own field intermediaries. Revenue per policy is small, so volume and operating efficiency matter.
• Voluntary enrolment means real selling. Since 2020, loanee farmers can opt out. Retention now depends on farmers believing claims will be paid. Fast, visible payouts in a district do more for next season's enrolment than any campaign.
• Local presence is expected. Scheme guidelines expect insurers to keep staff at district and block level in the areas they serve. Field teams that help with loss intimation within 72 hours, crop cutting experiments and grievance resolution are the scheme's front line.
• It anchors rural relationships. Crop insurance teams build contacts with farmer producer organisations, cooperatives and panchayats. Those contacts are useful for meeting rural obligations and for selling livestock, life and health cover.
• Results swing with the monsoon. Crop is a volatile line for insurers and reinsurers. Distribution plans built on crop premium should allow for years when States change models or insurers exit districts.