STATE AGRICULTRE MINISTERS’ CONFERENCE PRESENTATION ON REVAMPING PRADHAN MANTRI FASAL BIMA YOJANA

1. STATE AGRICULTRE MINISTERS’ CONFERENCEPRESENTATION ON REVAMPING PRADHAN MANTRI FASAL BIMA YOJANA JULY 08, 2019

2. Background of PMFBY • Pan India scheme - implemented in 27 States and Union Territories • Fixed contribution from farmers across the geographies • 2% of sum insured for Summer crops, 1.5% of sum insured for Winter Crops, and 5% for commercial/ horticulture crops • Remaining premium shared equally between Central and State Governments - (50-50) • Entire crop cycle covered – pre sowing to post harvest • Farmers availing KCC loans (loanee farmers) are compulsorily covered under the scheme, while non-loanee farmers apply for the scheme voluntarily • Insurance unit reduced to village/village panchayat level for widespread calamity and individual farm for localized risks • Sum insured equated to scale of finance to ensure entire investment of a farmer is covered. Clustering of districts for better operational viability

3. Where have we reached till now Technology Insured Area Sum Insured Voluntary Coverage Crop Combinations Sum Insured increased from Rs 1.15 lakh crore to Rs 2.36 lakh crore (larger risk coverage for same crop) Number of crop combinations notified increased from 80 to 200 Voluntary coverage increased from 5% to 36% Insured Area increased from 22% to 30% of Gross Cropped Area (GCA) Technological intervention in administration of the scheme – e.g. NCIP and CCE Agri app

4. Where have we reached till now • Kharif 2018 claims are not yet fully reported • Rabi 2018-19 enrolment and claims statistics are provisional

5. Challenges & Proposed Solutions • Crop Cutting Experiments – Challenges • Large number of CCEs (70 lakh per year) within a short span of time is difficult to achieve. • Shortage of manpower to conduct huge number of CCEs in a short harvesting window • Manipulations during conduct of CCE - Non-adherence to CCE processes, disclosure of CCEs experimental plots in advance • Limited use of CCE app for recording and sharing CCE yield data – (<15% of total CCEs conducted) • Delay in approval of data on CCE App/sharing CCE yield data with Insurance Companies by State Government • Schedule of CCEs not shared by State Government with Insurance Companies as per stipulated timelines • Limited co-observance of CCEs by Insurance Companies Proposed Solutions • 2-step process for assessment of yield based on preliminary weather-based indices followed by conduct of CCEs - By Sep 2020 • Smart Sampling and CCE Optimization - By Sep 2020 • Enhancement of National Crop Insurance Portal (NCIP) and Linking to Unified Farmer Database (consisting of digitized land records) - By Dec 2020 • Auto approval of CCE yield data on CCE App/CCE co-observance App after cut-off date. In case of delay/deficiency in CCE data, usage of synthetic yield - By Kharif 2020 • Direct Yield Estimation of All Major Crops - By Sep 2023

6. Challenges & Proposed Solutions • Pricing and Insurance Companies related issues – Challenges • Public perception that Insurance companies are making profit from the scheme • Many district crop combinations having high premium rates leading to an increase in overall cost of PMFBY Proposed Solutions • Improved Risk Management through creation of State-Level Corpus Fund or National-Level Risk Pool - By March 2020 • Removal of High Premium Crops from the ambit of Crop Insurance - ByKharif2020 • Irrigated area within a crop in a district is more than 50% - Premium Ceiling for coverage under PMFBY at 25% • Irrigated area within a crop in a district is less than 50% - Premium Ceiling for coverage under PMFBY at 30% • Above limits to be revisited every year • State-Specific Issues –Challenges • Delay in sharing of subsidy by the states leading to delay in claims settlement to farmers • Low investment by Insurance Companies in terms of accessibility and outreach due to short contract durations • Repeated tendering process delays the overall implementation of crop insurance in States Proposed Solutions • Deduction of overdue State Subsidy from Central Transfer to States - ByKharif2020 • Making multi-year tenders (minimum 3 years) mandatory for all States – By Kharif 2020

7. Challenges & Proposed Solutions • Monitoring mechanism – Challenges • Around 30 districts account for half of the overall claims across the nation Proposed Solutions • Direct monitoring and increased engagement with identified “Focus Districts” - By Kharif 2020 • North Eastern Region – Challenges • Low penetration of the scheme in North Eastern region due to no provision of identifying individual beneficiaries within community owned lands Proposed Solutions • Restructuring the entitlement of individual beneficiaries of community owned lands in NER in line with PM-KISAN - ByKharif2020 • Product Design – Challenges • Compulsory enrolment on loanee farmers leads to dissent from farmers who do not wish to avail insurance or those who were enrolled without consent • Inconsistency in yield data leads to high premium rates for some crops in certain districts Proposed Solutions • Making Scheme Voluntary – Views from States have been requested, still awaited • Migration of crops with inconsistent yield data to Weather-Based Insurance Scheme - By Kharif 2020

8. Name of the State: _________________________________________________ Decision Points: Any Other Suggestions: 1. 2. Name:____________________________________________ Signature:___________________________________________

9. THANK YOU