Pradhan Mantri Fasal Bima Yojana: Bihar rejoins central crop insurance
Source:financial-express ↗
Why It Matters
Questions on central and state agricultural schemes (like PMFBY and PM-KUSUM), crop seasons (Rabi/Kharif), and the agricultural economy of Bihar are highly frequent in BPSC Prelims. This policy shift is a direct potential question for current affairs and Bihar-specific economy.
Summary
Bihar is preparing to rejoin the central crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY), beginning with the Rabi agricultural season of 2026-27. Having previously opted out to run its own state-level program, the Bihar Rajya Fasal Sahayata Yojana, the state's return to PMFBY signals a shift towards integrating with the national framework for agricultural risk management. This move aims to provide farmers with more robust financial protection against crop losses due to unpredictable natural calamities and strengthens cooperative mechanisms between the Centre and the State in agricultural policy.
Key Points
- Bihar government plans to rejoin the central crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY), starting from the Rabi 2026-27 season.
- The state previously implemented its own scheme, Bihar Rajya Fasal Sahayata Yojana, after opting out of the central initiative in 2018.
- Joining PMFBY will integrate Bihar's farmers into the national crop risk management framework, offering financial protection against non-preventable natural risks.
- This move reflects improved Center-State coordination in agricultural welfare and is expected to boost the safety net for cultivators in Bihar.
Important Terms
Pradhan Mantri Fasal Bima Yojana (PMFBY)
A centrally sponsored crop insurance scheme offering financial coverage against non-preventable natural risks. It features uniform, highly subsidized premiums for farmers—1.5% for Rabi, 2% for Kharif, and 5% for commercial crops.
UPSC context
Crucial for GS-3 (Agriculture) and GS-2 (Welfare). Tests knowledge of agricultural risk management and farm income stabilization.
Bihar Rajya Fasal Sahayata Yojana
A state-specific crop assistance scheme launched by Bihar to provide financial relief for crop losses during natural disasters, notably without requiring farmers to pay any insurance premium.
UPSC context
Relevant to GS-3 (Agriculture) and Centre-State relations. Illustrates state-level policy adaptations and decentralized agricultural safety nets.
Ministry of Agriculture and Farmers Welfare
The primary central government body responsible for formulating broad agricultural policies, administering farmer welfare programs like PMFBY, and driving agrarian development across Indian states.
UPSC context
Essential for GS-2 (Governance). Demonstrates the institutional and administrative framework guiding national food security and agrarian welfare.
Prelims Trap
"PMFBY enrollment is mandatory for farmers availing institutional credit (Kisan Credit Card loans)."
PMFBY was originally mandatory for loanee farmers, but the Centre revamped the scheme and made it 100% voluntary for all farmers starting from the Kharif 2020 season.
Static Concepts Connected
What are the core premium and coverage features of the Pradhan Mantri Fasal Bima Yojana?
- Uniform Premiums: Farmers pay a maximum of 1.5% for Rabi, 2% for Kharif, and 5% for annual commercial/horticultural crops.
- Comprehensive Risk: Covers yield losses from non-preventable risks, spanning prevented sowing, standing crop damage, localized calamities, and post-harvest losses.
- Voluntary Enrollment: The scheme was made completely voluntary for both loanee and non-loanee farmers beginning from the Kharif 2020 season.
How is the financial burden of PMFBY shared between the Centre and States?
- Subsidy Sharing: The remaining actuarial premium (subsidy) is generally shared equally (50:50) between the Central and State governments.
- Special Category: For North Eastern states, the Centre bears 90% of the subsidy burden (90:10 ratio) to ease the fiscal stress on these states.
Cross-Topic Patterns
Fiscal Federalism & CSS Opt-outs
Bihar’s return highlights the fiscal unsustainability of standalone state insurance schemes amidst rising climate-risk payouts, reflecting the limits of state capacity in Centrally Sponsored Schemes (CSS).
PMFBY + Climate-Smart Agriculture
Expanding PMFBY coverage is increasingly linked with integrating local weather-station data and climate-resilient farming techniques to reduce actuarial premiums and accurately assess localized calamities.
Expect a multi-statement question combining PMFBY premium specifics, its voluntary nature, and climate-induced crop loss coverage in 2026.
Linked PYQs · 4
Linked PYQs · 4
- 2018BPSC_PRELIMSGS1
Which scheme was recognized as world's largest insurance scheme launched in India in September 2018?
- 2025BPSC_PRELIMSGS1
Which of the following is a Kharif crop?
- 2024-EBPSC_PRELIMSGS1
What is the contribution of agriculture in the Gross Domestic Product (GDP) of Bihar?
- 2024-IBPSC_PRELIMSGS1
In which district of Bihar, wheat crop production is maximum?
