Farmers to give declaration to banks to opt out of 'PMFBY' scheme

The central government has spent almost Rs 50,000 crore on the scheme till now, as its share of premium subsidy.
Farmers with loan dues will need to give a simple declaration to their bank branch seven days before the final date for enrolment under the Pradhan Mantri Fasal Bima Yojana (PMFBY) to opt out of the scheme, the government has said.

The cut-off date for enrolment is July 31 for the kharif season and December 31 for rabi. The clarification has been issued after last month’s decision to make PMFBY voluntary for loanee farmers as well. For non-loanee farmers, the scheme has been optional since the beginning. 

Senior officials said banks have been directed to maintain a record of the declarations given by farmers, so that no premium is deducted after someone has opted to move out of the scheme. 

The Centre has also urged banks to conduct an awareness drive among loanee farmers to persuade they remain with the scheme. Also, to try and ensure the current beneficiaries of schemes such as PM-KISAN, Jan-Dhan, etc, remain in the PMFBY.

Last month, a little more than three years after it was launched by Prime Minister Narendra Modi with much fanfare, the Union cabinet took the decision to make the scheme optional for loanee farmers. It also approved some changes in the scheme, with the aim of making it more attractive.

The central government has spent almost Rs 50,000 crore on the scheme till now, as its share of premium subsidy. 

Officials say the share of non-loanee farmers, for whom the scheme is voluntary since the beginning, has been steadily rising, a pointer to its acceptability among a vast section. Critics say the increase largely is in a single state, Maharashtra. 

In kharif 2016, around 10.2 million non-loanee farmers enrolled. This rose to 12.4 million in kharif 2018, a jump of 22 per cent. In rabi 2016-17, the share of non-loanee farmers in enrolment under PMFBY was 3.4 million, rising to 7.9 million by rabi 2018-19, an increase of 132 per cent.

Under PMFBY, a farmer pays two per cent of the sum insured as share of premium for kharif crops, 1.5 per cent for rabi and 5 per cent for horticultural and commercial crops. If the actuarial premium is lower, this lesser rate would apply. The difference between the actuarial premium rate and that paid by farmers is the subsidy, shared equally between Centre and states.




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