Climate Risks and Crop Insurance: PMFBY and RWBCIS Overview
UPSC / SSC current affairs note · Schemes
Why in news
The Press Information Bureau released a statement on July 24, 2026, detailing the mechanisms of crop insurance schemes under climate risks. It highlights the area-based approach for yield shortfalls and localized risk assessment, along with recent reforms for timely claim settlement.
Background
Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) are government initiatives to insure farmers against crop loss. They operate primarily on an 'Area Approach' using Crop Cutting Experiments (CCE) and technology-based yield estimates. Localized risks like hailstorm and post-harvest losses are assessed individually.
Key facts
PMFBY and RWBCIS use an 'Area Approach' where claims are based on actual yield reduction compared to threshold yield, assessed via CCE and Yes-Tech technology.
Localized risks (hailstorm, landslide, flood, cloudburst, natural fire) and post-harvest losses due to cyclone, unseasonal rain, and hailstorm are assessed on an individual insured field basis.
For localized risks, a joint committee of state government and insurance company representatives assesses loss extent and claims within prescribed timelines.
Under SDRF, input subsidy is payable only if crop loss is assessed at 33% or more; assessment is done by revenue and agriculture department officials via joint survey.
For NDRF assistance, the state submits a memorandum to the central government, followed by an Inter-Ministerial Central Team (IMCT) visit for physical verification.
SDRF/NDRF loss assessment is specific to natural disasters in a particular area and is not comparable to regular PMFBY/RWBCIS claims.
National Crop Insurance Portal (NCIP) serves as a single data source for online enrollment, subsidy payment, and electronic transfer of claim amounts.
DigiClaim module (since Kharif 2022) integrates NCIP with PFMS and insurance companies' accounting systems for timely and transparent claim settlement.
From Kharif 2024, automatic 12% penalty is calculated and recovered if insurance company delays payment; from Kharif 2025, 12% penalty applies for delayed release of state subsidy share.
From Kharif 2025, states must open an Escrow account to deposit their premium share in advance for financial discipline.
Prelims pointers
- PMFBY: Pradhan Mantri Fasal Bima Yojana
- RWBCIS: Restructured Weather Based Crop Insurance Scheme
- CCE: Crop Cutting Experiment
- NCIP: National Crop Insurance Portal
- PFMS: Public Financial Management System
- DigiClaim module
- SDRF: State Disaster Response Fund
- NDRF: National Disaster Response Fund
- IMCT: Inter-Ministerial Central Team
- Escrow account for premium deposit
Mains angles
- GS3 Agriculture: Evaluate the effectiveness of PMFBY in addressing climate-induced crop losses, with reference to area approach vs. individual assessment.
- GS3 Disaster Management: Discuss the role of SDRF and NDRF in providing relief for crop loss due to natural disasters and how it complements crop insurance schemes.
- GS2 Governance: Analyze the technological interventions (NCIP, DigiClaim, CCE Agri-App) in improving transparency and timeliness of claim settlement under PMFBY.
- GS3 Agriculture: Critically examine the challenges in implementing crop insurance schemes in India, including issues of delay, assessment discrepancies, and financial discipline.