Insurance for agriculture

Insurance for agriculture is very important.

This is only the way to protect farmers from uncertainty and devastating losses from this profession

World over except few countries, conditions of farmers are not very good and due to many reasons, this occupation has become less profitable.

This is the need of the time that farmers are protected from all types of uncertainty. Crop insurance may be the game-changer in the long run and may turn around agriculture as a profitable occupation.

Why we need agricultural insurance schemes in India?

India is one of the countries in the world in which the largest population is depending on agriculture.

In India Agriculture is a very risky business as farmers are dependent on natural weather conditions like rain and temperature etc.

Moreover, there is quite an uncertainty about the yield and prices of the harvested crops and vegetables.

There are multiple instances when the whole crop of the farmer was destroyed by adverse climate conditions and the farmer couldn’t even recover his/her even cost of production.

Due to this, most of the younger generation, belonging to farming families are leaving this occupation and moving to other profitable businesses.

Most of these people ending up becoming migrant workers and moved to cities which in turn to create a lot of unemployment and unrest and to put a big extra load to existing infrastructure.

Considering the magnitude of the problem Government of India implemented Insurance for agriculture i.e. Prime Minister’s Fasal Bima Yojana (PMFBY) so that farmers can be protected.

Prime Minister’s Fasal Bima Yojana (PMFBY)

To save farmers from loss of crops due to natural calamity, weeds, and pests and also encourage them to adopt modern agriculture PMFBY was launched.

This will also ensure a constant flow of credit to the farming sector.


PMFBY is implemented through multi agencies, which include selected insurance companies, Govt. of India, DAC&W, MoA&FW, and state govt., its agencies, and other financial institutions.

At present following insurance agencies are working for Insurance for agriculture – PMFBY.

These are –

1) ICICI-Lombard General Insurance Company Ltd.

2) HDFC-ERGO General Insurance Company Ltd.

3) IFFCO-Tokio General Insurance Company Ltd.

4) Cholamandalam MS General Insurance 2 Company Ltd.

5) Bajaj Allianz General Insurance Company Ltd.

6) Reliance General Insurance Company Ltd.

 7) Future Generali India Insurance Company Ltd.

8) Tata-AIG General Insurance Company Ltd.

9) SBI General Insurance Company Ltd.

 10) Universal Sompo General Insurance Company Ltd.

These are the Covered Crops and conditions for inclusion:

1. The Insurance for Agriculture Scheme covers all the Crops for which past yield data is available and grown during the notified season, in a Notified Area.


2. For a crop that yield estimation at the Notified Area level will be available based on the requisite number of Crop Cutting Experiments.


FARMERS TO BE COVERED: All farmers growing notified crops in a notified area for during the season and have an insurable interest in the crop is eligible.

Following losses are covered

YIELD LOSSES (standing crops, on a notified area basis):

1.    If the crop is standing in the farmers s field and loses occurred due to

(i)    In the case of Natural Fire and Lightning

(ii)   In the case of Storm, Hailstorm, Cyclone,  etc.

(iii)  (iii) Flood, Inundation, and Landslide

(iv)  (iv) Drought, Dry spells

(v)   (v) Pests/ Diseases etc.


2.    PREVENTED SOWING (on a notified area basis):-

If in case farmers are not able to sow their insured crop due to adverse weather conditions.


If the crop is cut & spread condition then any loss occurred due to unseasonal rains or any other this type of climatic condition. Insurance cover only happens if it occurred within 14 days after harvesting. 

4.    Localized CALAMITIES (individual farm basis)

Any loss from identifiable localized hailstorms, landslides, and inundations is also covered in this policy.



These are individual farm-based and  Coverage is only available within14 days from harvesting. It is available for those crops which are kept in “cut & spread” condition to dry in the field and got damaged due to cyclone / cyclonic rains, unseasonal rains throughout the country.

EXCLUSIONS from Insurance for agriculture Policy:

1.    Loss due to war.

2.    Loss due to malicious damage.

3.    Theft

4.    Act of enmity

5.    Destroyed by domestic or wild animals.

Insurance premium

1.    For Kharifcrop and oilseeds crop – 2.0% of the sum insured.

2.    Rabicrops – 1.5% of the sum insured

3.    Horticultural crops – 5% of the sum insured



In case the farmer has taken a loan as under Compulsory Component, then sum insured will be equal to the finance for that crop fixed by the district-level technical committee.

Value of the sum insured will be ascertained by multiplying the Notional Threshold Yield with the Minimum Support Price (MSP) of the current year.

If farmers are covered on a voluntary basis then the sum insured is up to the value of threshold yield x (MSP or gate price) of the insured crop.


All the settlements will be done through banks as per the mechanism provided by governments.

To register for Prime Minister’s Fasal Bima Yojana (PMFBY)-


Open this link


Then go to Farmer Corner – 


click login for a farmer




Here you have to enter full detail of the farmer who wants to enroll in this scheme. These details include Name, Mobile no. area, crop, location of his state, District, and village. 

You can also use a calculator to check what will be the premium for your crop and area.

Once you applied you will be able to check your application status, report about crop loss, and ask questions online.

You can refer to our some other articles:

Why Indian Farmers need help from the Government

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