August 2, 2025 — eBharat.com News Desk
A new chapter has opened in India’s flagship crop insurance program — all thanks to issues in Andhra Pradesh. Union Agriculture Minister Shivraj Singh Chouhan addressed Parliament this week, sharply criticizing the previous YSRCP-led Andhra Pradesh government for failing to pay its share of insurance premiums under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
As reported, this non-payment led to thousands of farmers being denied insurance benefits for three straight years.
Centre Reforms PMFBY to Safeguard Farmers
In response to Andhra’s lapse, the Ministry has revised PMFBY guidelines:
- The Union Government will now pay its premium share independent of state payments, ensuring farmers receive coverage regardless.
- If a state defaults, it will face a 12% annual penalty, which will be paid directly to affected farmers. No farmer will now lose out due to state-level delay or negligence.
State Defaults—History & Scale
State government defaults have long plagued PMFBY. Between FY21–25, defaults across states crossed ₹6,450 crore, with Andhra Pradesh alone accounting for ₹2,565 crore. Other notable defaulters include Rajasthan and Madhya Pradesh.
Why Andhra’s Case Was a Turning Point
Earlier, some states like Andhra had announced they would bear farmers’ premium share themselves. But their failure to follow through caused large-scale denial of claims, compelling the Centre to fundamentally overhaul PMFBY rules.
Summary of Key Changes
| Before Revision | New Guidelines |
|---|---|
| Farmer pays nominal premium → Centre and State share | Centre’s share guaranteed regardless of state |
| No penalty for state delays | Defaulting states charged 12% interest, paid to farmer |
| States deciding subsidy schedules | Standardized implementation and accountability via NCIP |
These changes aim to boost claim settlement discipline, eliminate bureaucratic delays, and restore trust among farmers.
While Andhra Pradesh faces scrutiny for defaulting on crop insurance premiums, other states like Uttar Pradesh are working to expand farmer access. In fact, UP recently extended the PMFBY enrollment deadline to August 14 for non-loanee and August 30 for loanee farmers — ensuring more coverage during the Kharif season.
What It Means for Farmers
Farmers across Andhra—and beyond—can now file claims with greater confidence, knowing that non-payment by their state won’t block their access to compensation. This rule reform strengthens the scheme’s integrity and ensures a more resilient safety net.
This bold move ushered in by the Centre is a clear signal: PMFBY is no longer optional—adherence is mandatory. The new penalty and subsidy framework is designed to ensure farmers remain the only beneficiaries, never lost in political or administrative failure.
With successful implementation, this may well become a defining pivot in making crop insurance fairer, smoother, and genuinely farmer-centric.
