PMFBY at a glance — India's flagship crop insurance
The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched January 2016, is India's largest crop insurance programme. Cumulatively through FY2024-25, PMFBY has insured ~4 crore farmer applications per year across 110+ crops, paid ₹1.55+ lakh crore in claims, with state and central governments together bearing about 95% of the actuarial premium. The farmer pays only a notional share — 2% for kharif food/oilseeds, 1.5% for rabi food/oilseeds, 5% for annual horticulture and commercial crops. The calculator implements both the farmer-premium computation and the indemnity-claim estimation, using the official PMFBY formula.
Coverage and risks insured
PMFBY covers four risk windows: (1) prevented sowing / failed germinationdue to adverse seasonal weather (25% of SI cap); (2) standing-crop wide-area yield loss from drought, flood, pest, disease — assessed via state-conducted Crop Cutting Experiments (CCEs); (3) localised calamities such as hailstorm, landslide, cloudburst, inundation — assessed by joint farmer-insurer-state inspection within 72 hours of report via the AIDE app or local intermediary; (4) post-harvest losses for crops kept on field up to 14 days due to cyclone, unseasonal rains.
The claim formula in operational detail
Claim per hectare = Max(0, (TY − AY) / TY) × Sum Insured. Threshold Yield (TY) is thebest 5 of last 7 years moving average × indemnity level (70%, 80%, or 90% — chosen by state). Indemnity level 80% is the most common in major states. If the block-level CCE-based actual yield (AY) falls below TY, the loss factor is non-zero and proportionate compensation flows.
Example: paddy in Banswara, Rajasthan kharif 2024-25. SI declared by State Level Coordination Committee at ₹65,000/ha. TY = 22 q/ha (best-5-of-7 average 27.5 × 80% indemnity). AY (post-CCE) = 16 q/ha. Loss factor = (22 − 16) / 22 = 27.3%. Claim per hectare = 0.273 × 65,000 = ₹17,727. For 2-ha farmer = ₹35,454.
Premium math the farmer pays
- Kharif paddy in our example: 2% × 65,000 × 2 ha = ₹2,600 — pre-mid-July last date
- Rabi wheat at SI ₹70,000/ha for 1 ha: 1.5% × 70,000 = ₹1,050 — pre-Dec last date
- Annual horticulture commercial sugarcane SI ₹1,30,000/ha: 5% × 1,30,000 = ₹6,500
The actuarial premium charged by insurers averages 12-25% of SI; the state and centre share the residual (after subtracting farmer's portion) equally. Hill, north-eastern and UT states get higher central share. Companies cap their per-cluster losses through reinsurance pools.
Enrolment process and deadlines
Farmers enrol through their bank (for loanee farmers), CSC (Common Service Centre), or directly via the PMFBY portal / AIDE app. Last date for enrolment differs by state and season; typical kharif cut-off is 31 July, rabi 31 December. Documents needed: land records (khasra-khatauni / khata-pahani), Aadhaar, bank passbook, sowing declaration. Crop reset insurance for "Restructured Weather-Based Crop Insurance Scheme" (RWBCIS) is parallel to PMFBY but uses weather-station data instead of CCE.
Why claim ratios vary across states
FY2023-24 claim-to-premium ratios: Maharashtra 121%, Andhra Pradesh 88%, Karnataka 93%, Rajasthan 79%, MP 64%, Gujarat 58%, Tamil Nadu 41%. Maharashtra's higher-than-1 ratio reflects severe Marathwada drought-cum-Vidarbha pink-bollworm in 2022-24; insurers operated at structural loss for two years. Several "non-major" states withdrew (Punjab, Bihar, Andhra Pradesh in 2020-22 — Andhra rejoined 2023) and launched state-level schemes (PMFBY in Bihar replaced by Bihar Rajya Fasal Sahayata Yojana 2018).
Documentation pitfalls leading to claim denial
- Sowing declaration mismatch: the crop reported on the insurance must match the actual sown crop. CCE survey teams reject claims for "off-list" crops.
- Loanee opt-out form missed: many farmers report they were enrolled without their knowledge by the bank deducting premium from KCC.
- Localised calamity not reported within 72 hours: hailstorm and cloudburst losses must be reported within 72 hours via AIDE for joint inspection.
- Wrong khasra coordinates: with PMFBY 2.0 (geo-tagging mandatory), khasra without coordinates leads to rejection.
RWBCIS — weather-based alternative
RWBCIS uses automatic weather-station data (rainfall, temperature, humidity) to trigger payouts when weather indices breach thresholds — no CCE needed. Faster payouts (within 30 days of season-end) but covers fewer crops; mostly horticulture (mango, citrus, banana, pomegranate, grape, apple). Premium share same as PMFBY.
Decision framework: enrol or skip?
Enrol if (a) you live in an actuarially-volatile block (search PMFBY portal's "Notional Average Yield" — high variance blocks), (b) your crop is high-value (cotton, horticulture, sugarcane), (c) your break-even yield (see calculator) is within 20% of expected yield. Skip if your area enjoys reliable canal water (Punjab paddy on lower Bari Doab Canal, Karnataka Cauvery delta) and your break-even has 35%+ buffer. The Krishi PMFBY page in the Schemes section provides state-by-state enrolment links.
Sources
PMFBY Operational Guidelines, Department of Agriculture & Farmers Welfare, revised 2024; PMFBY annual statistics dashboard 2024-25; CACP Price Policyreports; ICAR-NCAP Performance Review of PMFBY 2023; CAG audit reports on PMFBY 2022.