Farming is a high-stakes gamble against nature, with threats lurking at every turn—from unpredictable weather during cultivation to volatile market prices post-harvest. To shield India’s farmers from these uncertainties, the nation has continually refined its crop insurance framework.
The journey began in 1999 with the National Agricultural Insurance Scheme (NAIS), followed by a series of pivotal pilot programs that culminated in the National Crop Insurance Programme (NCIP) in 2013. Building on these foundations, the government launched the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather-Based Crop Insurance Scheme (RWBCIS) in 2016, marking a significant leap in agricultural risk management. Unlike its predecessors, PMFBY provides comprehensive coverage from sowing to post-harvest, offers uniform and affordable premiums, leverages technology for swift claims processing, and ensures transparency through a centralized digital portal. RWBCIS complements this by offering coverage based on weather conditions, enabling farmers to better mitigate climate-related risks.
For decades, crop insurance in India was more experimental than reliable. Before 1985, various small-scale schemes were tested regionally, but none achieved national implementation. The Comprehensive Crop Insurance Scheme (CCIS) changed that, becoming India’s first nationwide initiative. However, challenges persisted, leading to the introduction of subsequent schemes like NAIS, MNAIS and WBCIS.
The evolution continued with the NCIP in 2013, consolidating multiple schemes. Despite initial resistance from some states, NAIS was eventually phased out, paving the way for a more streamlined system.
India’s crop insurance system has been in constant flux, adapting to farmers’ evolving needs. While the path has been challenging, each step has brought India closer to providing a robust insurance safety net.
The financial sustainability of these schemes has been a persistent challenge. Early schemes like CCIS and NAIS faced significant claim payouts, often exceeding premium collections. However, weather-based insurance models and the modern PMFBY have shown greater financial viability.
PMFBY, implemented by a mix of public and private insurers, has processed vast amounts of claims, with ₹2.08 lakh crore paid out across all crop insurance schemes. The system now utilizes technology for automated claims processing and direct bank transfers, enhancing efficiency.
While challenges like banking delays and data disputes remain, India’s commitment to refining its crop insurance system underscores its dedication to protecting its farmers from the inherent risks of agriculture.
