AIC chief seeks review of PMFBY

With the Narendra Modi government's flagship crop insurance scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY), nearing a decade since launch, Lavanya R Mundayur, chairman and managing director of the Agriculture Insurance Company (AIC) of India, spoke with Harsh Kumar and Sanjeeb Mukherjee in New Delhi. She shared her views on the scheme's performance, lessons learnt, and where course correction was needed. She also discussed AIC's road map and plans for business expansion.

- 

PMFBY is a major part of your business. Where do you see it heading now?

PMFBY continues to make up a considerable portion of our portfolio. The number of farmers covered is steadily increasing, and participation by non-loanee farmers is also growing. However, the overall business remains somewhat flat.

What is the subscription cost, and how are premiums trending?

Premium rates are decreasing, thanks to the caps introduced in most states. Today, you'll see models like 81:10 or 61:30 in most places. The fully open premium model is almost non-existent now. States are experimenting with structures like burn-cost models, but the pricing framework remains dynamic.

If the product is so good, why isn't coverage expanding beyond this?

That's the core issue. We're now almost a decade into the scheme, but coverage—in terms of both farmers and area—has plateaued. While the active crop cultivation base is about 80 million farmers, the number covered under PMFBY should be much higher.

Where is the resistance or challenge coming from?

I wouldn't call it resistance; it's more about the complexities of the ecosystem. We are dependent on banks and other intermediaries. Crop insurance is a sensitive business, with moving parts.

Do you think making the scheme voluntary was a mistake?