Given the vulnerability of Indian agriculture to vagaries of nature, discuss the need for crop insurance and bring out the salient features of the Pradhan Mantri Fasal Bima Yojana (PMFBY).

Indian agriculture remains heavily rain-dependent, exposed to droughts, floods, pests and unseasonal weather. Such vagaries destabilise incomes and can push farmers into debt and distress, making risk transfer through crop insurance essential.

Need for crop insurance

• Stabilises farm income against yield loss from natural calamities.
• Sustains creditworthiness and access to institutional finance.
• Encourages adoption of modern inputs by cushioning downside risk.
• Reduces distress migration and, in extreme cases, farmer suicides.

Salient features of PMFBY (2016)

• Uniform low farmer premium: 2% for kharif food and oilseed crops, 1.5% for rabi, and 5% for annual commercial/horticultural crops; the balance is shared by the Centre and States.
• No cap on the sum insured or government subsidy; the full sum insured is paid on loss.
• Coverage of localised risks (hailstorm, landslide, inundation), prevented sowing and post-harvest losses.
• Use of technology (smartphones, remote sensing, drones) to speed yield assessment and claim settlement.
• Made voluntary for all farmers (revamped 2020), covering loanee and non-loanee farmers alike.

Concerns

• Delayed claim settlement and delayed premium subsidy release by States.
• Disputes over crop-cutting experiments and low awareness among small farmers.

Effectively implemented with timely, technology-driven assessment, PMFBY can risk-proof farm incomes and make agriculture more resilient to a changing climate.