Ministry of Agriculture and Farmers Welfare signs MoU with UNDP for strategic partnership on Agriculture, Crop Insurance and Credit


  • The Ministry of Agriculture and Farmers Welfare, Government of India and the United Nations Development Program (UNDP) have signed a Memorandum of Understanding (MoU) wherein UNDP will provide technical support towards Centre’s aspirational Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme & Kisan Credit Card – Modified Interest Subvention Scheme(KCC-MISS)
  • Under the MoU, UNDP will leverage its expertise in systems and global know-how for supporting the Ministry of Agriculture for the implementation of combined agriculture credit and crop insurance.
  • Till date the farmers paid about Rs 21000 crore premium under PMFBY, whereas they have received more than Rs 1.15 lakh crore as compensation from the government of India. This shows thw effectiveness of the scheme in the interest of the entire farming community. Efforts are continuously made totake PMFBY and KCC-MISS to all small farmers, livestock farmers and fishermen
  • KCC-MISS and PMFBY were launched with the aim to tackle the problematic areas of previous Schemes and to map out a structure that affords better implementation options for all stakeholders while achieving the desired results. 
  • One of the biggest features of the current schemes is that they apply uniformly across the entire country and have a provision to cover all crops.
  • As per the MoU, UNDP will provide responsive, demand-driven technical assistance for effective implementation of agriculture credit and crop insurance, as well as providing capacity development and Information, Education & Communication (IEC) support to existing national and state institutions, keeping in mind the interest of small and marginal farmers, women farmers, sharecroppers, tenant and non-loanee farmers.

Pradhan Mantri Fasal Bima Yojana (PMFBY):

  • Government of India launched The Pradhan Mantri Fasal Bima Yojana on February 2016 as an insurance service for farmers for their yeild.
  • It replaced two existing schemes namely, National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS)
  • It aims to reduce the burden of premium on the farmers and ensure timely settlement of claim for the full sum insured.
  • The Scheme covers all Food crops (Cereals, Millets and Pulses), Oilseeds, and Annual Commercial / Annual Horticultural crops for which past yield data is available.
  • The scheme is implemented by empanelled general insurance companies. Selection of Implementing Agency (IA) is done by the concerned State Government through bidding. 
  • The scheme was earlier compulsory for loanee farmers availing crop Loan and voluntary for other others but has been made completely voluntary since 2020 Kharif season when new reforms were introduced.
  • The scheme is being administered by Ministry of Agriculture and Farmers Welfare.
  • This scheme is helping farmers in becoming self reliant by paying the claims to the farmers in the event of a crop loss
  • The prescribed premium is 2% to be paid by farmers for all Kharif crops and 1.5% for all rabi crops. In the case of annual commercial and horticultural crops, the premium is 5%.

Main Objectives-

Pradhan Mantri Fasal Bima Yojana (PMFBY) aims at supporting sustainable production in agriculture sector by way of - 

  • providing financial support to farmers suffering crop loss/damage arising out of unforeseen events 
  • stabilizing the income of farmers to ensure their continuance in farming 
  • encouraging farmers to adopt innovative and modern agricultural practices 
  • ensuring flow of credit to the agriculture sector; which will contribute to food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from production risks.

Risks covered-

  • YIELD LOSSES - cover yield losses due to non-preventable risks, such as (i) Natural Fire and Lightning (ii) Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado etc. (iii) Flood, Inundation and Landslide (iv) Drought, Dry spells (v) Pests/ Diseases etc. 
  • PREVENTED SOWING - prevented from sowing/planting the insured crop due to adverse weather conditions, shall be eligible for indemnity claims upto a maximum of 25% of the sum-insured 
  • POST-HARVEST LOSSES - Coverage is available upto a maximum period of 14 days from harvesting, against specific perils of cyclone / cyclonic rains, unseasonal rains throughout the country.
  • LOCALISED CALAMITIES - Loss / damage resulting from occurrence of identified localized risks i.e. hailstorm, landslide, and Inundation affecting isolated farms in the notified area.

Performance of PMFBY:

  • Till date, the scheme has insured almost over 30 crore farmers with about 5.5 crore farmers on a year-on-year basis
  • More than 8.3 crore farmers were benefitted from the scheme in last 5 years.

“Meri Policy Mere Hath” is a doorstep distribution drive to deliver crop insurance policies to the farmers. The campaign aims to ensure all farmers are well aware and equipped with all information on their policies, land records, the process of claim and grievance redressal under PMFBY.

United Nations Development Program (UNDP):

  • The United Nations is an international organisation established in 1945 and headquartered in New York City, USA.
  • Functions: Helps develop and build resilience to policies, leadership skills, partnership capabilities and institutional capabilities to fuel the development of a country.
  • Important Reports and Index published by UNDP-
  • Human Development Index
  • Global Multidimensional Poverty Index
  • Education Development Index
  • Gender Inequality Index