PMFBY scheme: Crop insurance premium may change in Pradhan Mantri Fasal Bima Yojana 2.0

The premium of crop insurance is likely to be revised after the Union Cabinet approved the changes in the existing Pradhan Mantri Fasal Bima Yojana (PMFBY), an official said. Under the new farm insurance scheme which is also considered as PMFBY 2.0, the government made major changes making it optional for farmers.

Launched in February 2016 by Prime Minister Narendra Modi, it is mandatory for loanee farmers to take insurance cover under the PMFBY. Currently, 58 per cent of the total farmers are loanees.

"We are waiting for the detailed guidelines. Yes, I think we will have to revisit our products and premium of crop insurance, taking into account the new developments," chairman and managing director of Agriculture Insurance Company of India Ltd, Malay Kumar Poddar told PTI.

The state-owned crop insurance company official, however, did not disclose whether the premium would be increased or not, but experts said that it may head north for a particular risk coverage.

"Now, with crop insurance being made optional for both agriculture loanee and non-loanee, the number of farmers under the coverage may come down, which could lead to an increase of the underwriting cost," an insurance company official said on condition of anonymity.

In the existing scheme, there are five riders in the crop insurance coverage but under the new scheme, one can pick and choose the risk cover according to one's need, Poddar said.

AICIL currently has a licence for crop insurance in the country and has sought approval from the Insurance Regulatory and Development Authority of India for offering more products covering other verticals of agriculture and allied sectors, he said.

The company said it aims at offering "comprehensive" insurance products for the rural population rather than restricting itself to crop insurance.

Poddar said he expects to get the regulator's nod in near future for "rural comprehensive insurance product that will cover all areas related to agriculture, aquaculture, animal husbandry and farm equipment".

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He also hoped that the company will be able to bring down the total cost of insurance with the comprehensive policy by covering all risks of a farmer's livelihood.