How PMFBY is Protecting Crops and Securing Rural Livelihoods

Indian agriculture, the backbone of our nation, has long been a high-stakes endeavour. Farmers tirelessly battle the unpredictable forces of nature — floods, droughts, unseasonal rains — alongside economic pressures like rising input costs and fluctuating market prices. These challenges don’t just affect their crops; they erode their financial stability and, more importantly, their peace of mind.

But what if there was a safety net, a shield against these uncertainties? Pradhan Mantri Fasal Bima Yojana (PMFBY), the world’s largest crop insurance scheme, is performing this role admirably while quietly revolutionising farmer wellbeing across India.

The Unseen Burden: Farmer Distress in India

For generations, a bad harvest could mean devastating debt, lost livelihoods, and stress for farming families. The impact of climate change has only amplified this, making weather patterns more erratic and crop failures more frequent. Rising input costs for seeds, fertilisers, and labour, coupled with low yield, often accompanied by low selling prices for their produce, squeeze farmers from both ends. The dream of a good yield and a fair price often turn into a nightmare, leading to immense financial and emotional strain.

This is where PMFBY steps in as a beacon of hope.

PMFBY: A Shield Against Uncertainty

Launched in 2016, PMFBY replaced older, less effective schemes with a more farmer-friendly approach. The core idea is simple: provide financial support to farmers suffering crop loss or damage arising out of unforeseen events. It covers a wide range of perils, from natural calamities to pest attacks, and offers comprehensive risk coverage.

The most significant aspect is the low premium rates for farmers — 2% for Kharif crops, 1.5% for Rabi crops, and 5% for annual commercial/horticultural crops — with a major fraction of the premium borne by the government. This makes insurance accessible even to the most vulnerable farmers.

Since its inception:

• 29.19 crore farmer applications have been insured.
• INR 95,000+ crore in claims have been paid out.
• The scheme has reached 498 districts across 21 States/UTs.

In 2024 alone:

• 9.58 crore applications were processed.
• INR 19,66,201 lakh in gross premiums were collected.
• INR 7,08,022 lakh in claims were paid out.
• 58.92 lakh farmers received direct benefits.

These figures aren’t just statistics. They represent families able to rebuild, children continuing their education, and communities with a renewed sense of security.

 Peace of Mind in the Face of Adversity

The true impact of PMFBY lies in its ability to provide farmers with peace of mind. In a profession where a single season’s failure can lead to debt, distress sales, or even migration, PMFBY offers a financial cushion that allows farmers to recover, reinvest, and continue farming with confidence.

Imagine the relief of knowing that even if the rains fail or a hailstorm strikes, your family won’t be plunged into destitution. This scheme isn’t just about financial payouts; it’s about restoring dignity, reducing anxiety, and empowering farmers to continue their vital work with renewed confidence.

Kshema’s Role: On the Ground, Making a Difference

While PMFBY provides the framework, its successful implementation relies on dedicated partners. This is where insurance providers like Kshema General Insurance play a crucial role. Kshema has been instrumental in bridging the gap between the scheme and farmers, particularly in underserved regions.

In the 2023–24 Kharif season, Kshema processed 581,606 applications and disbursed INR 160+ crore in claims across the three districts of Sri Ganganagar, Bundi, and Alwar only in Rajasthan.

Kshema’s work under PMFBY involves:

• Farmer Mobilisation and Awareness: Educating farmers about the benefits of PMFBY and guiding them through the enrolment process.
• Technology-driven Solutions: Utilising satellite imagery, geospatial analytics, and mobile apps for efficient data collection, claim processing, and communication.
• Ground-level Support: Providing direct assistance to farmers in filing claims and navigating the insurance process.

In states from some of the biggest like Uttar Pradesh, Madhya Pradesh, Karnataka, and Telangana to smaller states like Manipur and union territory like Andaman, Kshema has actively worked with thousands of farmers, ensuring they understand and benefit from PMFBY and its associate product RWBCIS. In a recent season, Kshema facilitated the enrolment of over 5 lakh farmers, processing claims worth INR 500 crore, demonstrating its efficiency and reach in ensuring farmers receive timely compensation.

Despite challenges, —including misinformation and resistance during field surveys, —Kshema remains committed to ensuring that every legitimate claim is settled swiftly, safeguarding both farmers and public funds.

Beyond Insurance: Building Resilience

PMFBY is more than just a financial instrument. It is a catalyst for agricultural resilience. By reducing the financial risks associated with farming, the scheme encourages farmers to adopt better practices, invest in innovation, and diversify their crops. It also plays a critical role in climate adaptation, helping farmers cope with the increasing frequency of extreme weather events.

Kshema’s work under PMFBY aligns with this broader vision. Through its outreach programmes and data-driven insights, Kshema is helping farmers make informed decisions and build sustainable livelihoods. The company’s emphasis on farmer education and empowerment ensures that insurance is not just a tool, but a proactive strategy for growth.

The Future of Farmer Wellbeing

As India continues to grapple with the challenges of climate change, food security, and rural distress, Pradhan Mantri Fasal Bima Yojana (PMFBY) gives hope to millions of farmers. With continued support from stakeholders like Kshema, the scheme is evolving to become more inclusive, efficient, and responsive to farmers’ needs.

At Kshema, we believe that every farmer deserves protection, dignity, and peace of mind. Our work under PMFBY is a testament to this belief—a commitment to transforming agriculture from a gamble into a secure and rewarding profession.

The story of PMFBY is not just about numbers and policies. It is about the millions of farmers who sleep better at night, knowing that their crops, their incomes, and their futures are protected. And in that story, Kshema is proud to play an impactful role. For a broader perspective on how agricultural insurance is evolving to support farmers across India, read this analysis by The Hindu BusinessLine on transforming India’s insurance landscape.