1. Conceptual Foundation

Meaning and Purpose

Crop Insurance is a financial risk-mitigation tool designed to protect agricultural producers against financial losses resulting from crop failure, yield reduction, or damaged produce caused by natural disasters (droughts, floods, hail, pests, diseases, or unseasonal rains). Pradhan Mantri Fasal Bima Yojana (PMFBY) is India's flagship, yield-based comprehensive crop insurance scheme launched in 2016 to offer affordable, technology-driven, end-to-end risk cover to farmers. Weather Derivatives (and Weather-Index Insurance) are specialized financial contracts whose value is linked to observable weather indices (rainfall volume, temperature fluctuations, humidity levels, or wind speed). Instead of measuring physical crop damage on individual fields, weather derivatives trigger automatic payouts when a recorded weather index breaches predetermined thresholds, eliminating moral hazard and field inspection delays.

Importance

In civil services examinations (TGPSC / UPSC), Unit 11.5 is a high-priority, modern risk-management subtopic. Exam questions regularly evaluate:

1. Chronological evolution of Indian crop insurance schemes (CCIS -> NAIS -> MNAIS -> PMFBY / RWBCIS).
2. Uniform premium rates payable by farmers under PMFBY (1.5% for Rabi, 2.0% for Kharif, and 5.0% for Annual Commercial / Horticultural crops).
3. Risk coverage phases under PMFBY (Prevented Sowing, Standing Crop Yield Loss, Post-Harvest Loss, and Localized Calamities).
4. Structural revamps in PMFBY (transition from compulsory for loanee farmers to 100% voluntary for all farmers in 2020; removal of premium capping).
5. Technological integration (Drones, Satellite Remote Sensing, Crop Cutting Experiments - CCEs, CROPIC App, and National Crop Insurance Portal - NCIP).
6. Financial weather risk instruments (NCDEX Weather Derivatives regulated by SEBI) and state-level policy distinctions (Telangana's Rythu Bima life cover vs. PMFBY crop loss cover).

How Concepts Connect

1. Climatic Vulnerability to Yield Instability: Indian agriculture is heavily exposed to climate anomalies (erratic monsoons, dry spells, unseasonal post-harvest rainfall). Crop yield instability directly threatens farmer solvency and triggers debt distress.
2. Yield Insurance vs. Weather Index Insurance: Traditional crop insurance relies on physical Crop Cutting Experiments (CCEs) at the Gram Panchayat / Mandal level to estimate actual yield loss, which often causes procedural delays in claim settlement. Weather Derivatives / Index Insurance (RWBCIS) bypass physical yield estimation by relying on automated weather station data, ensuring instantaneous claim disbursement.
3. Credit Flow to Risk Mitigation: Banks and credit institutions face high Non-Performing Asset (NPA) risks when natural calamities destroy standing crops. By insuring crops under PMFBY, the credit worthiness of farmers is preserved, ensuring continuous credit flow through the Kisan Credit Card (KCC) framework.
4. State Subsidy Sharing to Fiscal Realities: The difference between actuarial premium rates charged by insurance companies and the low fixed premium paid by farmers is funded equally (50:50) by the Central and State Governments (90:10 in North-Eastern states), creating a direct link between state budgetary allocations and rural safety nets.

                      AGRICULTURAL RISK MANAGEMENT & INSURANCE ARCHITECTURE
                                                |
        +---------------------------------------+---------------------------------------+
        |                                                                               |
  PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY)                                 WEATHER DERIVATIVES & INDEXING
        |                                                                               |
        +---> Nodal Ministry: Ministry of Agriculture & FW                              +---> Weather-Based Crop Insurance (RWBCIS)
        |---> Implementing Body: AICIL + Empaneled Insurers                             |      |---> Parameter-Based (Rainfall, Temp, Wind)
        |---> Theme: "One Nation, One Scheme" (Jan 2016)                               |      |---> Measured via Reference Weather Stations
        |                                                                               |      |---> Zero CCE requirement; fast payout
        +---> Uniform Premium Slabs (Farmer Share)                                      |
        |      |---> Kharif Crops: 2.0% of Sum Insured                                  +---> Financial Weather Derivatives
        |      |---> Rabi Crops: 1.5% of Sum Insured                                    |      |---> NCDEX + IMD Collaboration
        |      |---> Commercial / Horticulture: 5.0% of Sum Insured                     |      |---> Regulated by SEBI
        |                                                                               |      |---> Hedging tool for farmers & agri-firms
        +---> 4-Stage Risk Coverage                                                     |
        |      |---> 1. Prevented Sowing / Planting                                     +---> Telangana Context
        |      |---> 2. Standing Crop Yield Losses                                            |---> PMFBY Re-entry & Re-engagement
        |      |---> 3. Post-Harvest Losses (Up to 14 days)                                    |---> Distinct from Rythu Bima (Life Cover)
        |      |---> 4. Localized Calamities (Hailstorm, Landslide)
        |
        +---> Key Reforms & Tech (Post-2020)
               |---> 100% Voluntary for All Farmers (Loanee & Non-Loanee)
               |---> Mandatory Drones, Remote Sensing & CROPIC App for CCE
               |---> Direct Benefit Transfer via National Crop Insurance Portal

Key Terms

1. Actuarial Premium Rate: The statistically calculated premium rate that reflects the true mathematical risk of crop loss in a given agro-climatic unit.
2. Sum Insured: The maximum financial coverage amount guaranteed per hectare under an insurance policy, usually tied to the scale of finance or average yield value.
3. Crop Cutting Experiment (CCE): A standardized agronomic method where a sample plot of a specified size is harvested in a selected village/Gram Panchayat to estimate the average yield per hectare for a crop.
4. Prevented Sowing Risk: Coverage provided when an insured farmer is unable to sow or plant seeds due to severe rainfall deficit or adverse seasonal weather conditions.
5. Post-Harvest Loss Cover: Coverage available for up to 14 days after harvesting for crops left in "cut-and-spread" condition in the field to dry, against unseasonal or cyclonic rains.
6. Localized Calamities: Losses affecting isolated individual farms caused by specific, localized natural perils such as hailstorms, landslides, or localized inundation.
7. Restructured Weather Based Crop Insurance Scheme (RWBCIS): A parametric crop insurance scheme that uses weather indices (rainfall, temperature, humidity) measured at weather stations to compensate for crop damage.
8. Weather Derivatives: Financial contracts traded on commodity exchanges (e.g., NCDEX) that allow market participants to hedge against financial losses resulting from unfavorable weather conditions.
9. CROPIC App: A mobile application utilized by field functionaries to geotag and upload real-time images and data during Crop Cutting Experiments (CCEs) to prevent fraudulent claims.
10. Rythu Bima: Telangana's flagship farmer life insurance scheme executed in partnership with LIC, providing a flat death relief of Rs 5 Lakh to the nominee of a deceased farmer aged 18–59 years.

Short Timeline of Crop Insurance Milestones in India

1. 1971–1978: Introduction of the First Individual Approach Crop Insurance Scheme (experimental basis for cotton).
2. 1979–1984: Launch of the Pilot Crop Insurance Scheme (PCIS) based on the "Area Approach".
3. 1985–1999: Implementation of the Comprehensive Crop Insurance Scheme (CCIS) linked to institutional crop loans.
4. 1999 (Rabi): Launch of the National Agricultural Insurance Scheme (NAIS), expanding coverage to non-loanee farmers.
5. 2002 (December): Incorporation of the Agriculture Insurance Company of India Limited (AICIL) as a specialized public crop insurer.
6. 2007–2008: Introduction of the Weather Based Crop Insurance Scheme (WBCIS) on a pilot basis.
7. 2010–2011: Launch of the Modified NAIS (MNAIS) featuring private insurer participation and reduced premium caps.
8. 2016 (January): Approval of Pradhan Mantri Fasal Bima Yojana (PMFBY) and RWBCIS, replacing NAIS and MNAIS under the motto "One Nation, One Scheme".
9. 2020 (Kharif): Comprehensive revamp of PMFBY—made 100% voluntary for all farmers (including loanee farmers) and capping central premium subsidies for unirrigated/irrigated areas.
10. 2025: Introduction of India's First Agricultural Weather Derivatives by NCDEX in partnership with the India Meteorological Department (IMD) under SEBI regulation.

2. Complete Core Notes

A. Historical Evolution of Crop Insurance Schemes in India

Before the introduction of PMFBY in 2016, crop insurance in India evolved through several experimental frameworks:

1. Individual Approach Scheme (1971–1978):
   • Evaluated crop loss on an individual farm basis.
   • Failure Cause: High administrative costs, moral hazard, and extreme difficulty in assessing individual farm losses nationwide.
2. Comprehensive Crop Insurance Scheme (CCIS - 1985–1999):
   • Adopted the "Homogeneous Area Approach" (using a defined geographical area like a Tehsil/Block as a single unit).
   • Restricted strictly to loanee farmers taking short-term crop loans from formal banks.
3. National Agricultural Insurance Scheme (NAIS - 1999–2016):
   • Implemented by AICIL. Covered both loanee and non-loanee farmers across foodgrains, oilseeds, and annual commercial crops.
   • Limitations: High actuarial premium rates, low sum insured due to "capping" of government premium subsidies, and severe claim settlement delays (often taking 8 to 12 months).
4. Modified NAIS (MNAIS - 2010–2016):
   • Introduced minimum guaranteed unit size (Gram Panchayat) for CCEs and post-harvest loss coverage, but retained complex premium capping rules.

B. Pradhan Mantri Fasal Bima Yojana (PMFBY): Core Framework

1. Overview and Motto

• Launch Date: Approved by the Union Cabinet on January 13, 2016 (implemented from Kharif 2016 season).
• Motto: "One Nation, One Scheme". Replaced NAIS and MNAIS.
• Nodal Ministry: Ministry of Agriculture and Farmers Welfare (MoA&FW).
• Implementing Agency: Agriculture Insurance Company of India Limited (AICIL) along with empaneled private general insurance companies selected by State Governments through competitive bidding.

2. Uniform Low Premium Rates (Farmer Share)

PMFBY removed high actuarial premium burdens from farmers by fixing uniform, historically low rates:

1. Kharif Crops (Foodgrains, Millets, Pulses, Oilseeds): 2.0% of Sum Insured.
2. Rabi Crops (Foodgrains, Millets, Pulses, Oilseeds): 1.5% of Sum Insured.
3. Annual Commercial and Annual Horticultural Crops: 5.0% of Sum Insured.

3. Premium Subsidy Mechanism

• The difference between the actual Actuarial Premium Rate charged by insurers and the fixed Farmer's Premium Share is the Premium Subsidy.
• Subsidy Sharing Ratio:
  • General States: Shared 50:50 between the Central Government and the respective State Government.
  • North-Eastern States: Shared 90:10 between the Central Government and North-Eastern State Governments (revised in 2020 to boost adoption in the NE region).
• Removal of Capping: Unlike older schemes where government premium subsidies were capped (which reduced the final claim amount paid to farmers during heavy losses), PMFBY removed all capping on premium subsidies. Farmers receive the full sum insured without any arbitrary reduction.

4. Comprehensive 4-Stage Risk Coverage

PMFBY provides complete coverage across the entire crop lifecycle:

1. Prevented Sowing / Planting Risk: Claims up to 25% of the sum insured are paid if the majority of insured farmers in a defined area are prevented from sowing/planting due to adverse weather conditions (deficit rainfall).
2. Standing Crop Yield Loss (Sowing to Harvesting): Covers non-preventable yield losses caused by natural fire, lightning, drought, dry spells, floods, inundation, pests, diseases, landslides, and natural storms. Losses are assessed using Crop Cutting Experiments (CCEs).
3. Post-Harvest Losses: Covers specific perils of cyclonic rains, unseasonal rains, and hailstorms affecting crops harvested and kept in "cut-and-spread" condition in the field to dry, for up to 14 days after harvesting.
4. Localized Calamities: Covers loss/damage to standing crops on isolated individual farms caused by notified localized perils: Hailstorm, Landslide, and Inundation.

C. PMFBY Revamp (2020 Reforms & Recent Guidelines)

To resolve state-level fiscal strains and administrative delays, the Central Government restructured PMFBY rules starting in Kharif 2020:

1. 100% Voluntary for All Farmers:
   • Prior to 2020, PMFBY was mandatory for farmers availing institutional crop loans (loanee farmers).
   • Under Revamped PMFBY, the scheme is completely voluntary for ALL farmers (both loanee and non-loanee farmers). Loanee farmers can opt out by informing their bank branch in writing.
2. Central Subsidy Capping Threshold:
   • Central Government limits its premium subsidy share to actuarial premium rates up to 30% for unirrigated areas/crops and 25% for irrigated areas/crops. (States choosing to empanel insurers charging higher actuarial rates must bear the excess subsidy independently).
3. Two-Year Minimum Tenure for Insurers:
   • States must award insurance contracts to empaneled companies for a minimum 3-year term (instead of 1 year) to ensure long-term operational commitment.
4. Penalty for Delayed Subsidy Release:
   • If a State Government delays releasing its share of the premium subsidy beyond stipulated deadlines (e.g., September 30 for Kharif), the state is disqualified from implementing the scheme in subsequent seasons, and insurance companies must pay 12% per annum interest to farmers for delayed claim settlements beyond 2 months.

D. Technology Integration in Crop Insurance

1. National Crop Insurance Portal (NCIP): An integrated digital platform linking banks, insurance companies, state agriculture departments, and farmers to ensure transparent enrollment and direct claim transfers via Direct Benefit Transfer (DBT).
2. Crop Cutting Experiments (CCEs) & Technology Integration:
   • Traditionally, states perform over 14 lakh manual CCEs annually.
   • PMFBY mandates the use of Smartphones, Geotagging, Remote Sensing Satellites, Drones (UAVs), and the CROPIC App to verify CCEs, detect crop stress, and reduce claim processing time from months to weeks.
3. YES-TECH (Yield Estimation System based on Technology): A technology-based framework using satellite imagery and weather models to estimate crop yields automatically, reducing reliance on manual CCEs.

E. Restructured Weather Based Crop Insurance Scheme (RWBCIS) & Weather Derivatives

1. RWBCIS (Parametric / Index Insurance)

• Operates alongside PMFBY using a parametric weather index (rainfall deficit, excess rainfall, temperature spikes, frost, relative humidity, wind speed) measured at Reference Weather Stations (RWS).
• Core Advantage: Does not require physical yield sampling via CCEs. If the weather station records data breaching the predefined weather index, claims are processed automatically for all insured farmers in that weather zone.

2. Weather Derivatives in India

• Concept: Traded financial contracts (futures and options) linked to weather indicators (e.g., Rainfall Index, Heatwave Index).
• Recent Development: In 2025, the National Commodity & Derivatives Exchange (NCDEX), in collaboration with the India Meteorological Department (IMD), introduced India's first Agricultural Weather Derivatives under the regulatory oversight of SEBI.
• Utility: Allows large aggregators, seed companies, food processors, and progressive farmer collectives (FPOs) to hedge financial losses against severe climatic anomalies.

F. Telangana Context: PMFBY Position & Rythu Bima Distinction

1. Telangana & PMFBY Framework

• Telangana implemented PMFBY initially but opted out in 2020 due to heavy state premium subsidy outlays and delayed claim disbursements by private insurers.
• Recent Policy Shift: The Government of Telangana subsequently initiated steps to re-enter PMFBY to ensure comprehensive risk coverage for paddy, cotton, and horticulture growers against unseasonal hailstorms and inundation.

2. Clear Distinction: PMFBY vs. Rythu Bima Scheme

G. Plain-Text Formulas & Equations

1. Farmer's Premium Share (Kharif Foodgrains & Oilseeds): Farmer Premium = Sum Insured * 0.02 (2.0%)

2. Farmer's Premium Share (Rabi Foodgrains & Oilseeds): Farmer Premium = Sum Insured * 0.015 (1.5%)

3. Farmer's Premium Share (Commercial / Horticultural Crops): Farmer Premium = Sum Insured * 0.05 (5.0%)

4. Total Government Premium Subsidy: Total Subsidy = Total Actuarial Premium Amount - Farmer Premium Share

5. PMFBY Yield Loss Shortfall Calculation: Shortfall Percentage = [(Threshold Yield - Actual Yield) / Threshold Yield] * 100 Claim Payout = Shortfall Percentage * Sum Insured (Where Threshold Yield = Average yield of best 5 out of preceding 7 years * Indemnity Level)

3. Key Concepts & Distinctions

Table 1: PMFBY Slabs & Premium Structure

Table 2: Yield-Based Insurance (PMFBY) vs. Weather-Index Insurance (RWBCIS)

Table 3: Pre-2020 PMFBY vs. Post-2020 Revamped PMFBY

4. Important One-Liners

1. PMFBY was approved on January 13, 2016 under the motto "One Nation, One Scheme".
2. PMFBY replaced the older National Agricultural Insurance Scheme (NAIS) and Modified NAIS (MNAIS).
3. The nodal ministry for PMFBY is the Ministry of Agriculture and Farmers Welfare (MoA&FW).
4. Agriculture Insurance Company of India Limited (AICIL) was incorporated in December 2002.
5. Farmer's premium share for Kharif crops under PMFBY is fixed at 2.0% of the sum insured.
6. Farmer's premium share for Rabi crops under PMFBY is fixed at 1.5% of the sum insured.
7. Farmer's premium share for Annual Commercial and Horticultural crops is fixed at 5.0%.
8. Government premium subsidy is shared 50:50 between Centre and States (90:10 for North-Eastern states).
9. PMFBY removed all upper capping on government premium subsidies, ensuring full sum insured payout.
10. PMFBY provides post-harvest loss coverage for up to 14 days for crops in cut-and-spread condition.
11. Localized calamities covered under PMFBY include Hailstorm, Landslide, and Inundation.
12. Under Kharif 2020 reforms, PMFBY was made 100% voluntary for all farmers, including loanee farmers.
13. Central premium subsidy in revamped PMFBY is capped at 30% for unirrigated and 25% for irrigated crops.
14. Insurance companies must pay an interest rate of 12% per annum to farmers for delayed claim settlements beyond 2 months.
15. Crop Cutting Experiments (CCEs) are used to estimate actual crop yields per hectare at the Gram Panchayat level.
16. The CROPIC App is used to capture geotagged images and data during Crop Cutting Experiments.
17. The National Crop Insurance Portal (NCIP) facilitates digital enrollment and Direct Benefit Transfer (DBT) of claims.
18. RWBCIS uses parametric weather indices measured at Reference Weather Stations (RWS) to trigger claims.
19. RWBCIS eliminates the requirement for physical Crop Cutting Experiments (CCEs).
20. In 2025, NCDEX partnered with IMD to introduce India's first Agricultural Weather Derivatives.
21. Weather derivatives in India are regulated by the Securities and Exchange Board of India (SEBI).
22. Telangana's Rythu Bima is a life insurance scheme providing Rs 5 Lakh death cover to farmers aged 18–59 years.
23. Rythu Bima is 100% funded by the Government of Telangana in partnership with LIC.
24. PMFBY covers crop yield losses, whereas Rythu Bima covers farmer mortality risk.
25. The Unified Package Insurance Scheme (UPIS) was piloted to integrate crop, asset, livestock, and life insurance for farmers.
26. Threshold Yield under PMFBY is calculated based on the average yield of the best 5 out of the preceding 7 years.
27. Prevented sowing risk provides payout up to 25% of the sum insured.
28. PMFBY utilizes drones, satellite remote sensing, and YES-TECH models to speed up claim assessments.
29. The Comprehensive Crop Insurance Scheme (CCIS) operated from 1985 to 1999 linked to institutional crop credit.
30. The Weather Based Crop Insurance Scheme (WBCIS) was originally launched on a pilot basis in 2007–08.

5. PYQ-Based Bits

• PMFBY Premium Rates & Scheme Replaced (UPSC 2017 / State PSCs):
  • PMFBY replaced NAIS and MNAIS in 2016, establishing uniform low premium rates of 1.5% for Rabi, 2.0% for Kharif, and 5.0% for Commercial/Horticultural crops, with no upper cap on government premium subsidy.
• Coverage of Post-Harvest & Localized Losses (UPSC 2018 / State PSCs):
  • PMFBY explicitly covers post-harvest losses up to 14 days for crops drying in cut-and-spread condition, as well as localized calamities like hailstorms, landslides, and inundation affecting individual isolated farms.
• Voluntary Transition in Revamped PMFBY (State PSCs / TGPSC PYQ):
  • Effective from Kharif 2020, PMFBY was made 100% voluntary for all farmers (including loanee farmers taking KCC loans), removing the earlier mandatory requirement for loanees.
• Weather Based Crop Insurance Scheme Characteristics (UPSC PYQ / State PSCs):
  • WBCIS / RWBCIS uses parametric weather triggers (rainfall, temperature, humidity) recorded at Reference Weather Stations, enabling fast, automated claim settlements without conducting physical Crop Cutting Experiments (CCEs).
• Telangana Rythu Bima vs PMFBY Distinction (TGPSC JL 2023 / VAS 2023):
  • Telangana's Rythu Bima is a 100% state-funded farmer life insurance scheme delivering Rs 5 Lakh death relief through LIC, whereas PMFBY is a crop yield damage insurance scheme.

6. Exam Analysis

• Priority: HIGH (Unit 11.5 is a core, high-yield subtopic evaluated regularly across civil services general studies and economics papers).
• Frequently Tested Subtopics:
  1. PMFBY Premium Slabs: 1.5% (Rabi), 2.0% (Kharif), 5.0% (Commercial/Horticulture).
  2. PMFBY Risk Stages: Prevented Sowing (25%), Standing Crop, Post-Harvest (14 days), Localized Calamities.
  3. Revamped PMFBY 2020: 100% Voluntary for loanees, 90:10 NE ratio, 30%/25% central subsidy cap, 12% interest penalty for delayed claims.
  4. RWBCIS vs. PMFBY: Parametric weather station triggers vs. physical Crop Cutting Experiments (CCEs).
  5. Weather Derivatives: NCDEX + IMD, SEBI regulation, hedging climatic risk.
  6. Telangana Context: Rythu Bima (Rs 5L life cover, LIC, 18–59 age) vs. PMFBY (crop loss).
• Common Question Patterns: Statement-verification questions on PMFBY premium rates and risk coverage clauses, distinguishing weather index insurance from yield-based insurance, identifying post-2020 revamp changes, and Rythu Bima vs PMFBY comparisons.
• Factual / Conceptual / Numerical / Statement Tendency: Heavily Statement-Based Scheme Rules combined with Exact Premium Percentages & Time Thresholds (1.5%, 2.0%, 5.0%, 14 days post-harvest, 100% voluntary, Rs 5 Lakh Rythu Bima).
• Simple Frequency Terms: PMFBY Premium Slabs & Coverage (Very Frequent); PMFBY Post-2020 Revamp (Very Frequent); RWBCIS & Weather Derivatives (Frequent); Rythu Bima Distinction (Frequent).

7. Exam Traps

• Confusion: Believing that PMFBY premium rates are actuarial rates that vary based on high risk or past disaster frequency. → Correct understanding: PMFBY charges fixed, uniform, low premium rates to farmers (1.5% Rabi, 2.0% Kharif, 5.0% Commercial/Horticulture). The actual actuarial premium difference above these rates is paid entirely by the Government as a subsidy.

• Confusion: Assuming that PMFBY remains compulsory for farmers who take institutional crop loans (KCC loans). → Correct understanding: Under the 2020 revamped guidelines, PMFBY was made 100% voluntary for ALL farmers, including loanee farmers.

• Confusion: Believing that Weather-Based Crop Insurance (RWBCIS) requires Crop Cutting Experiments (CCEs) in every village. → Correct understanding: RWBCIS is a parametric / index-based scheme that relies entirely on automated weather station (RWS) data, eliminating the need for physical CCEs.

• Confusion: Conflating Telangana's Rythu Bima scheme with PMFBY. → Correct understanding: Rythu Bima is a 100% state-funded life insurance scheme (Rs 5 Lakh payout upon farmer's death via LIC). PMFBY is a crop yield/damage insurance scheme.

• Confusion: Assuming that post-harvest loss under PMFBY covers crops stored in warehouses or godowns. → Correct understanding: Post-harvest coverage under PMFBY applies strictly to crops left in "cut-and-spread" condition in the field to dry, for up to 14 days after harvesting. Storage losses in godowns are excluded.

8. Rapid Revision

1. PMFBY Launch Date: January 13, 2016 ("One Nation, One Scheme").
2. Replaced Schemes: National Agricultural Insurance Scheme (NAIS) and Modified NAIS (MNAIS).
3. Nodal Ministry: Ministry of Agriculture and Farmers Welfare (MoA&FW).
4. Primary Public Insurer: Agriculture Insurance Company of India Limited (AICIL).
5. Kharif Farmer Premium: 2.0% of sum insured.
6. Rabi Farmer Premium: 1.5% of sum insured.
7. Commercial / Horticultural Premium: 5.0% of sum insured.
8. Premium Subsidy Sharing: 50:50 (Centre:State) in general states; 90:10 in North-Eastern states.
9. Capping Rule: No upper capping on government premium subsidy (full sum insured paid).
10. Prevented Sowing Cover: Payout up to 25% of sum insured for un-sown fields due to weather deficit.
11. Post-Harvest Cover: Up to 14 days for crops in cut-and-spread condition in the field.
12. Localized Perils Covered: Hailstorm, Landslide, and Inundation.
13. 2020 Revamp: Made 100% voluntary for ALL farmers (loanee & non-loanee).
14. Central Subsidy Cap (2020): Actuarial rate capped at 30% for unirrigated and 25% for irrigated crops.
15. Delay Penalty: Insurers/States face a 12% per annum interest penalty for claim delays > 2 months.
16. CCE Technology: Smart phones, geotagging, drones, and CROPIC App used to audit yield trials.
17. RWBCIS Nature: Parametric / Weather-Index Insurance measured at Reference Weather Stations.
18. RWBCIS Advantage: Eliminates manual CCEs, enabling automated, rapid claim settlement.
19. Weather Derivatives: Traded financial contracts (NCDEX + IMD) regulated by SEBI to hedge climatic risks.
20. Telangana Rythu Bima Cover: Rs 5 Lakh life insurance for farmers aged 18 to 59 years.
21. Rythu Bima Partner: 100% state-funded in partnership with Life Insurance Corporation of India (LIC).
22. Rythu Bima vs PMFBY: Rythu Bima covers farmer mortality; PMFBY covers crop damage/yield loss.
23. Threshold Yield Base: Average yield of the best 5 out of preceding 7 years.
24. National Crop Insurance Portal (NCIP): Central digital platform for enrollment and DBT claim transfers.
25. AICIL Establishment: Incorporated in December 2002 under the Companies Act.