Case Study:

In a village near Meerut, Ramesh, a small farmer, owns 2 hectares of land where he grows wheat and sugarcane. In 2025, he enrolled in the Pradhan Mantri Fasal Bima Yojana (PMFBY), paying a premium of 2% of the insured amount for his crops.

That year, due to unseasonal heavy rainfall and flooding, nearly 70% of his wheat crop was destroyed. The estimated loss was ₹40,000. However, since Ramesh had insured his crop under PMFBY, he received compensation of ₹32,000 after assessment by government officials.

Meanwhile, his neighbor Suresh, who did not opt for crop insurance, suffered the same level of loss but received no financial support, forcing him to take a loan at high interest rates.

The scheme also uses modern technology such as satellite imaging and mobile apps for faster claim settlement. However, some farmers in the village complained about delays in claim processing and lack of awareness about the scheme.

This situation highlights the importance of risk management in agriculture and raises questions about accessibility, awareness, and efficiency of government schemes in rural India.

Questions:

Section A - MCQs

1. Why was Ramesh able to recover part of his financial loss?

A. He sold his crops early
B. He had taken a bank loan
C. He had insured his crops under PMFBY
D. He received help from neighbors

2. What is the primary objective of crop insurance schemes?

A. Increase crop production
B. Provide financial protection against crop failure
C. Reduce farming costs
D. Promote exports

3. What could be a major reason for Suresh’s financial distress?

A. Lack of irrigation
B. Not using fertilizers
C. Not enrolling in crop insurance
D. Growing low-quality crops

4. Which of the following improves efficiency in claim settlement?
A. Manual record keeping
B. Satellite imaging and mobile apps
C. Traditional farming methods
D. Local money lenders

Section B - Short Answer Questions

1. Explain one benefit and one limitation of crop insurance schemes based on the case.

2. Why is awareness about schemes like PMFBY important for farmers?

3. How does crop insurance contribute to reducing rural indebtedness?

Section C - Long Answer Question

1. If the government increases awareness and reduces claim settlement delays, how might it impact farmers’ participation in crop insurance schemes? Analyze with reference to the case.

Answer Key:

Section A - MCQs Answers:

1. C
2. B
3. C
4. B

Section B - Short Answers:

1.

• Benefit: Provides financial compensation during crop loss.
• Limitation: Delays in claim settlement reduce effectiveness.

2. Awareness ensures more farmers enroll, helping them secure financial protection against unpredictable losses.

3. It reduces the need for high-interest loans during crop failure, thereby lowering debt burden on farmers.

Section C - Long Answer:

• Increased awareness --> more farmers enroll in schemes
• Reduced delays --> builds trust in government policies
• Farmers like Suresh would avoid financial distress
• Overall improvement in rural economic stability
• Encourages risk-taking and better agricultural investment