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Crop Insurance Policies in India: An Empirical Analysis of Pradhan Mantri Fasal Bima Yojana

Author

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  • Sandeep Kaur

    (Department of Economic Studies, Central University of Punjab, Ghudda, Bathinda 151401, India)

  • Hem Raj

    (Department of Economic Studies, Central University of Punjab, Ghudda, Bathinda 151401, India)

  • Harpreet Singh

    (Department of Economics, Punjab School of Economics, Guru Nanak Dev University, Amritsar 143005, India)

  • Vijay Kumar Chattu

    (Department of Medicine, Temerty Faculty of Medicine, University of Toronto, Toronto, ON M5G 2C4, Canada
    Department of Public Health, Saveetha Medical College and Hospitals, Saveetha Institute of Medical and Technical Sciences, Saveetha University, Chennai 600077, India)

Abstract

India is home to over one-third of all undernourished children worldwide, and it ranks 94th out of 107 nations in the Global Hunger Index 2020. Instability in production and market risks make agriculture a risky business and directly affect farmers’ income levels, thereby impacting food security. This review aimed to understand various features of different crop insurance policies in India and to analyze the Pradhan Mantri Fasal Bima Yojana’s (PMFBY) impacts on Indian farmers. A literature search was performed in all popular databases, including Scopus, Web of Science, ProQuest, AGRICOLA, AGRIS, and Google search engines, as well as annual Indian government reports. The keywords “Crop Insurance” OR “Pradhan Mantri Fasal Bima Yojana” OR “National Agriculture Schemes” AND “India” were searched to obtain relevant articles. By using cumulative data, we conducted a multiple regression analysis and a model was developed to estimate the effects of insurance characteristics on farmer coverage for the years 2017–2018 and 2018–2019. Agricultural insurance coverage under PMFBY remained low in terms of the number of farmers insured, the area insured, claims paid, and total farmers benefited. Compared to other schemes, the beneficiary and claim premium ratios were substantially lower under the PMFBY. The multiple regression analysis showed that farmers’ premiums have a significant effect on the number of farmers insured over time, although the subsidies do not have a significant influence in farmers’ insurance participation. Delays in claim settlement, the complexity of the system, and a lack of awareness among farmers are the major weaknesses of the PMFBY. Greater use of digital media could help spread awareness of these schemes among farmers.

Suggested Citation

  • Sandeep Kaur & Hem Raj & Harpreet Singh & Vijay Kumar Chattu, 2021. "Crop Insurance Policies in India: An Empirical Analysis of Pradhan Mantri Fasal Bima Yojana," Risks, MDPI, vol. 9(11), pages 1-26, October.
    • Handle: RePEc:gam:jrisks:v:9:y:2021:i:11:p:191-:d:665090
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    References listed on IDEAS

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    1. Pramod K. Mishra, 1994. "Crop insurance and crop credit: Impact of the comprehensive crop insurance scheme on cooperative credit in Gujarat," Journal of International Development, John Wiley & Sons, Ltd., vol. 6(5), pages 529-567, September.
    2. Rajesh Tiwari & Khem Chand & Bimal Anjum, 2020. "Crop Insurance in India: A Review of Pradhan Mantri Fasal Bima Yojana (PMFBY)," FIIB Business Review, , vol. 9(4), pages 249-255, December.
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    Cited by:

    1. Saxena, R. & Srivastava, S. K. & Balaji, S. J. & Jhajhria, A. & Md. Arshad Khan, 2023. "Changes in Indian Agriculture: Household-level Evidence," Policy Papers 344970, ICAR National Institute of Agricultural Economics and Policy Research (NIAP).

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