Determinants of Farmers' Awareness and Perspectives on Pradhan Mantri Fasal Bima Yojana in Southern Tamil Nadu, India

Abstract

Farmers in India face numerous risks that significantly impact their crop production, highlighting the need for effective crop insurance. Recognizing the limitations of the existing crop insurance system, the Government of India initiated the Pradhan Mantri Fasal Bima Yojana (PMFBY) during the Kharif 2016 season. This scheme offers competitive premiums and favourable terms, yet coverage of farmers remains low. This study investigates the factors influencing the farmers’ awareness and perceptions of the PMFBY scheme. The survey was conducted to collect primary data from 350 cotton farmers in Virudhunagar district, Tamil Nadu. Findings reveal that while farmers have partial awareness of various aspects of crop insurance, they are generally informed about premiums and procedural requirements. The probit model analysis identifies that education, organizational membership, mass media exposure, and extension contacts have a positive influence on farmers' awareness levels. However, negative perceptions persist, particularly concerning delayed claims, inadequate compensation, and high premium rates. This study recommends the implementation of government-led awareness programs designed to educate and cultivate greater awareness among farmers regarding crop insurance and its benefits. Such initiatives could enhance demand for crop insurance to mitigate the adverse impacts and ensure greater sustainability of farmers' livelihoods.