Agriculture Insurance in India: PMFBY and Reform Needs
Why in the news
With climate shocks rising, attention turned to how agriculture insurance can protect farmers and where the system still falls short.
Key facts
- Farming risks: weather anomalies, crop disease, pests and price swings.
- PMFBY gives broad cover against crop failure with subsidised premiums.
- The scheme uses satellite imagery and drones for quick damage assessment.
- Insurance helps with loss recovery and access to credit.
Problems and fixes
| Issue | Remedy suggested |
|---|---|
| Low awareness, distrust | Village-level campaigns and financial education |
| Slow claims | Digital, transparent process with real-time tracking and SMS updates |
| Weak data | AI, remote sensing, satellite imagery, local weather stations, mobile reporting apps |
| Narrow cover | Livestock insurance and low-premium micro-insurance |
| Climate volatility | Weather-index insurance paying on rainfall or temperature thresholds |
Weather-index insurance
- Pays out when preset rainfall or temperature thresholds are crossed.
- Quicker and simpler, but needs accurate local data and farmer trust.
Centre-state roles
- The Centre manages policy and funding.
- States handle local rollout, awareness and smooth claim processing.
- A transparent subsidy framework and close coordination are essential.
Outlook
- Climate risk, awareness, technology and policy are aligning for change; private insurers are bringing region-specific and crop-specific products.
Exam angle
- Scheme: Pradhan Mantri Fasal Bima Yojana.
- Tech used: satellite imagery and drones.
- Concept: weather-index insurance.