Pradhan Mantri Fasal Bima Yojana: Challenges and Way Forward
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The Indian agricultural environment has undergone numerous
structural changes due to changes in the government policies. One
new government policy, Pradhan Mantri Fasal Bima Yojana
(PMFBY) could have wide-ranging effects. The study covered the
opportunities and constraints for agricultural insurance in India,
how PMFBY will be supported and governance will be maintained,
and the best strategy for technology to increase farmer’s awareness
and successful implementation. Under PMFBY, the government’s
focus will be to bring in more farmers without loans (which comprise
merely 5 per cent of total farmers at present) under the scheme. A
total of 5,000 automated weather stations will be set up across the
country. The IRDA (Insurance Regulatory and Development
Authority), AIC (Agricultural Insurance Company), and 11 private
and four state-owned non-life insurers have expressed their
interest to participate in the scheme. Opportunities for agricultural
insurance in India are numerous and insurance can be a risk
transfer mechanism for Indian farmers that depend heavily on rains
especially with the increasing influence of climate change. There is
room for experiments and expansion of new insurance products
since penetration is low and there also a favorable political
environment for insurance and support of agricultural livelihoods.