Under Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS), the premium payable by farmers has been substantially reduced and simplified and there is one premium rate on pan-India basis for farmers which is maximum 1.5%, 2% and 5% of sum insured for Rabi, Kharif and annual horticultural / commercial crops, respectively.
Crop insurance is a major risk mitigation tool for the benefit of farmers. Insurance is all about spreading the risk over the period and over the area. Insurers save premium in good seasons/years and pay high claims, if any, in bad years from the savings made in the good years. As against the premium collected from farmers amounting to Rs.4216.04 crore in 2016-17, claims of Rs. 16279.25 crore have been paid to farmers. Similarly, claims of Rs.16967.92 crore have been paid during 2017-18 (Kharif 2017) against premium collected from farmers amounting to 3038.70 crore.
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