India Extends Crop Insurance Schemes With Technological Upgrades

Alankar Mishra

Author

Updated: 28-01-2025 at 7:45 AM

The Indian government has recently made the declaration for the extension of two major crop insurance plans Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) for the fiscal year 2025-26. The decision has been made in resonance with the 15th Finance Commission timeline. Additionally, the decision has come with an increased focus on looking to improve the efficiency of the agriculture schemes as well as addressing the issues faced by them.

Key Highlights

We will get to see some variations in the key highlights of the schemes, which have already been mentioned before including expansion of budget, technology adoption, and special incentives for select geo. Taking this into account, these are the highlights.

The schemes of PMFBY and RWBCIS have been extended for FY 2025-26.
Allocation rose to ₹69,515.71 crore for the period of 2021-22 to 2025-26.
A fund of ₹824.77 crores was set for tech advancements like YES-TECH and WINDS.
Subsidies of premium 90% in northeastern states.

Technological Advancements

The government is using modern technology to make government schemes for farmers more effective and easier to use. These technologies have helped improve data understanding, speed up processes, and increase transparency. Below are the key technologies being introduced:

YES-TECH (Yield Estimation System using Technology):

YES-TECH integrates satellite and remote sensing information to establish estimated crop yields.
Its goal is to lessen the quarrels and hasten the processing of claims.

Weather Information and Network Data Systems (WINDS):

Creating automated weather stations and rain meters that can track data and collect hyper-local information.
Implementation starts in 2024-25 which helps states get ready for the implementation.

Challenges and Regional Priorities

The schemes face some challenges, especially in certain regions like the Northeast and among insurers. Low participation and declining premium income are key concerns. Here are the main issues and steps being taken:

Low Participation in the Northeast: Despite 90% premium subsidies, low enrolment and limited cropped areas hinder the schemes' success.
Declining Insurer Participation:

Gross premiums underwritten for PMFBY fell by 4.17% in FY24.
State-run Agriculture Insurance Company (AIC) and other insurers reported significant drops in premium income.

To counter these challenges, the government introduced flexible fund allocation, allowing states to redirect unused funds to other agricultural projects.

Expanding Coverage For Non-Loanee Farmers

Farmers who are not availing loans can now also be insured through the app called AIDE which was launched in 2023 and acts as a solution gap for the farmers who don’t take loans. Some of its notable attributes are:

Enrolment of 6.88 lakh farmers in FY24.
Coverage of 4.15 lakh hectares across multiple states.

In the future, the government envisions increasing crop insurance usage by hiring around 12 lakh personnel on the ground and encouraging new farming methods.

Significance Of The Extension

Extending these govt schemes is important for protecting farmers and supporting agriculture. It helps reduce risks, promotes innovation, and shows the government’s strong commitment to farmers. Here are the key benefits of the extension:

Risk Mitigation: PMFBY and RWBCIS help insure against losses of crops due to yield risks and weather damages.
Enhanced Investment in Farmer: A bigger budget allocation exemplifies the willingness of the government to aid the farmers.
Fostering Innovation: The utilisation of technology promotes effective implementation guaranteeing that farmer confidence is increased.

Conclusion

The expansion of PMFBY and RWBCIS underlines the Indian government’s commitment to enhancing existing crop insurance systems. The farmer schemes offer innovative technology and seek to reduce differences between regions with the objectives of protecting farmers’ income security and promoting performance sustainability in agriculture.

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