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Crop & Agricultural Insurance

Introduction

Crop and Agricultural Insurance is a vital topic in Insurance Awareness, frequently asked in exams like IBPS PO, NIACL AO, UIIC AO, and SSC CGL. It covers insurance schemes designed to protect farmers against losses due to natural calamities, pests, and diseases affecting crops and livestock. Understanding this pattern helps candidates grasp government initiatives and insurance products tailored for the agricultural sector.

Pattern: Crop & Agricultural Insurance

Pattern

This pattern tests knowledge of various crop and agricultural insurance schemes, their objectives, features, and regulatory framework in India.

Key Concept:

Crop & Agricultural Insurance provides financial protection to farmers against crop failure or damage due to natural risks, ensuring income stability and encouraging agricultural growth.

Important Points:

  • Pradhan Mantri Fasal Bima Yojana (PMFBY) = A flagship government crop insurance scheme offering comprehensive coverage against yield losses due to natural calamities, pests, and diseases.
  • Coverage Types = Includes yield-based insurance, weather-based insurance, and livestock insurance.
  • Role of Insurance Companies = Both public sector insurers like General Insurance Corporation (GIC) and private insurers participate under IRDAI regulations.

Related Topics:

  • General Insurance
  • Government Agricultural Schemes
  • IRDAI Regulations on Agricultural Insurance

Step-by-Step Example

Question

Which of the following is the primary government scheme in India that provides insurance coverage to farmers against crop losses due to natural calamities and pests?

Options:

  • A. Pradhan Mantri Jeevan Jyoti Bima Yojana
  • B. Pradhan Mantri Fasal Bima Yojana
  • C. Atal Pension Yojana
  • D. Pradhan Mantri Suraksha Bima Yojana

Solution

  1. Step 1: Identify the scheme related to crop insurance

    Among the options, PMJJBY and PMSBY are life and accident insurance schemes, and APY is a pension scheme.

  2. Step 2: Recognize the scheme for crop loss coverage

    Pradhan Mantri Fasal Bima Yojana (PMFBY) is the flagship crop insurance scheme launched by the Government of India.

  3. Step 3: Confirm the purpose of PMFBY

    PMFBY provides financial support to farmers suffering crop loss due to natural calamities, pests, and diseases.

  4. Final Answer:

    Pradhan Mantri Fasal Bima Yojana → Option B

  5. Quick Check:

    PMFBY is widely recognized and regularly referenced in Indian insurance exams as the main crop insurance scheme.

Quick Variations

This pattern may appear in exams as:

  • 1. Questions on features and objectives of PMFBY.
  • 2. Comparisons between PMFBY and other agricultural insurance schemes like Weather Based Crop Insurance Scheme (WBCIS).
  • 3. Questions on the role of IRDAI and insurance companies in agricultural insurance.

Trick to Always Use

  • Remember the acronym PMFBY as the key crop insurance scheme launched in 2016 to protect farmers.
  • Distinguish crop insurance schemes from life and accident insurance schemes by focusing on the word "Fasal" (crop) in the scheme name.

Summary

Summary

  • Crop & Agricultural Insurance protects farmers against losses from natural calamities and pests.
  • Pradhan Mantri Fasal Bima Yojana (PMFBY) is the main government crop insurance scheme.
  • Both public and private insurers operate under IRDAI guidelines to implement agricultural insurance.

Remember:
PMFBY = Prime crop protection scheme for Indian farmers

Practice

(1/5)
1. Which of the following is the flagship government scheme in India that provides insurance coverage to farmers against crop losses due to natural calamities, pests, and diseases?
easy
A. Pradhan Mantri Suraksha Bima Yojana
B. Pradhan Mantri Jeevan Jyoti Bima Yojana
C. Atal Pension Yojana
D. Pradhan Mantri Fasal Bima Yojana

Solution

  1. Step 1: Identify the scheme related to crop insurance

    Among the options, PMJJBY and PMSBY are life and accident insurance schemes, and APY is a pension scheme.

  2. Step 2: Recognize the scheme for crop loss coverage

    Pradhan Mantri Fasal Bima Yojana (PMFBY) is the flagship crop insurance scheme launched by the Government of India to protect farmers from crop losses.

  3. Final Answer:

    Pradhan Mantri Fasal Bima Yojana → Option D

  4. Quick Check:

    PMFBY is widely recognized in Indian exams as the main crop insurance scheme for farmers.
Hint: Remember PMFBY as the key crop insurance scheme launched in 2016.
Common Mistakes: Confusing PMFBY with life or accident insurance schemes like PMJJBY or PMSBY.
2. Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), which of the following risks are covered for farmers?
easy
A. Natural calamities, pests, and diseases
B. Only drought and flood
C. Only pest attacks
D. Only crop failure due to market fluctuations

Solution

  1. Step 1: Understand PMFBY coverage

    PMFBY provides comprehensive coverage against various risks affecting crops.

  2. Step 2: Identify covered risks

    The scheme covers losses due to natural calamities (like drought, flood), pest attacks, and diseases.

  3. Final Answer:

    Natural calamities, pests, and diseases → Option A

  4. Quick Check:

    PMFBY is designed to protect farmers from multiple risks, not just one type.
Hint: Focus on the comprehensive nature of PMFBY coverage.
Common Mistakes: Limiting coverage to only one type of risk like drought or pests.
3. Which organization acts as the national reinsurer and plays a key role in agricultural insurance in India?
easy
A. General Insurance Corporation of India (GIC Re)
B. Life Insurance Corporation of India (LIC)
C. Insurance Regulatory and Development Authority of India (IRDAI)
D. New India Assurance Company

Solution

  1. Step 1: Identify the national reinsurer

    Among the options, GIC Re is the national reinsurer in India.

  2. Step 2: Role in agricultural insurance

    GIC Re supports crop and agricultural insurance by providing reinsurance to insurers.

  3. Final Answer:

    General Insurance Corporation of India (GIC Re) → Option A

  4. Quick Check:

    LIC is a life insurer, IRDAI is regulator, and New India Assurance is a general insurer but not the reinsurer.
Hint: Remember GIC Re as the national reinsurer supporting crop insurance.
Common Mistakes: Confusing LIC or IRDAI with the reinsurer role.
4. Which of the following statements about the Weather Based Crop Insurance Scheme (WBCIS) is correct?
medium
A. It provides coverage based on actual crop yield losses only
B. It compensates farmers based on weather parameters like rainfall and temperature
C. It is exclusively managed by private insurers without government involvement
D. It covers losses due to market price fluctuations

Solution

  1. Step 1: Understand WBCIS concept

    WBCIS is a weather-index based insurance scheme.

  2. Step 2: Identify correct coverage basis

    It compensates farmers based on deviations in weather parameters like rainfall, temperature, and humidity rather than actual yield losses.

  3. Final Answer:

    It compensates farmers based on weather parameters like rainfall and temperature → Option B

  4. Quick Check:

    WBCIS is different from yield-based schemes and involves government participation.
Hint: Remember WBCIS uses weather indices, not yield data, for claims.
Common Mistakes: Confusing WBCIS with yield-based insurance or thinking it covers market risks.
5. Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), who is responsible for premium subsidy payment to farmers?
medium
A. Only the Central Government
B. Only the State Government
C. Both Central and State Governments jointly
D. Insurance companies bear the subsidy cost

Solution

  1. Step 1: Understand subsidy structure in PMFBY

    PMFBY involves premium subsidies to make insurance affordable for farmers.

  2. Step 2: Identify subsidy responsibility

    The premium subsidy is shared jointly by the Central and respective State Governments as per scheme guidelines.

  3. Final Answer:

    Both Central and State Governments jointly → Option C

  4. Quick Check:

    Insurance companies do not bear subsidy costs; governments share the burden.
Hint: Remember subsidy is a joint responsibility of Central and State Governments under PMFBY.
Common Mistakes: Assuming subsidy is paid only by Central or State Government or by insurers.

Mock Test

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