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Weather Based Crop Insurance

This topic provides information about the restructured Weather Based Crop Insurance (WBCIS).

Weather Based Crop Insurance aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from incidence of adverse conditions of weather parameters like rainfall, temperature, frost, humidity etc.

Crops covered

  • Major Food crops (Cereals, Millets & Pulses) & Oilseeds
  • Commercial / Horticultural crops

Farmers covered

All farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas are eligible for coverage. However, farmers should have insurable interest on the insured crop. The non-loanee farmers are required to submit necessary documentary evidence of land records and / or applicable contract / agreements details (in case of sharecroppers / tenant farmers).

All farmers availing Seasonal Agricultural Operations (SAO) loans from Financial Institutions (i.e. loanee farmers) for the crop(s) notified are covered on compulsory basis.

The Scheme is optional for the non-loanee farmers. They can choose between WBCIS and PMFBY, and also the insurance company.

Perils covered

Following major weather perils, which are deemed to cause “Adverse Weather Incidence”, leading to crop loss, shall be covered under the scheme.

  • Rainfall – Deficit Rainfall, Excess rainfall, Unseasonal Rainfall, Rainy days, Dry-spell, Dry days
  • Relative Humidity
  • Temperature – High temperature (heat), Low temperature
  • Wind Speed
  • A combination of the above
  • Hailstorms, cloud-burst may also be covered as Add-on/Index-Plus products for those farmers who have already taken normal coverage under WBCIS.

The perils listed above are only indicative and not exhaustive, any addition deletion may be considered by insurance companies based on availability of relevant data.

Risk period (i.e. Insurance Period)

Risk period would ideally be from sowing period to maturity of the crop. Risk period depending on the duration of the crop and weather parameters chosen, could vary with individual crop and reference unit area and would be notified by SLCCCI before the commencement of risk period.

Premium rates

The revised premium rates payable by the cultivator for different crops are as follows:

S.No CROPS Maximum Insurance charges payable by farmer (% of Sum Insured)
i) Season - Kharif - Food & Oilseeds crops (all cereals, millets, & oilseeds, pulses) 2.0% of SI or Actuarial rate, whichever is less
ii) Season - Rabi - Food & Oilseeds crops (all cereals, millets, & oilseeds, pulses) 1.5% of SI or Actuarial rate, whichever is less
iii) Season - Rabi and Kharif - Annual Commercial / Annual Horticultural crops 5% of SI or Actuarial rate, whichever is less

The ‘net premium payable in case of the insured loanee cultivator is financed by the Lending Bank.

Insurance companies participating in WBCIS

The public sector and private sector General Insurance Companies empanelled by the Department of Agriculture & Cooperation (DAC) and Farmers Welfare, Government of India and selected by concerned State Government / Union Territory (UT) implement WBCIS.

Revamping of PMFBY and RWBCIS

The Union Cabinet, in February 2020, has approved revamping of "Pradhan Mantri Fasal Bima Yojana (PMFBY)" and "Restructured Weather Based Crop Insurance Scheme (RWBCIS)" to address the existing challenges in implementation of Crop Insurance Schemes.

It is proposed to modify certain parameters/provisions of ongoing schemes of PMFBY and RWBCIS as under:

  • Allocation of business to Insurance Companies to be done for three years (Both PMFBY/RWBCIS).
  • Option shall be given to States/UTs to choose Scale of Finance or district level Value of Notional Average Yield (NAY) i.e. NAY* Minimum Support Price (MSP) as Sum Insured for any district crop combination (Both PMFBY/RWBCIS). Farm gate price will be considered for the other crops for which MSP is not declared.
  • Central Subsidy under PMFBY/RWBCIS to be limited for premium rates upto 30% for unirrigated areas/crops and 25% for irrigated areas/crops. Districts having 50% or more irrigated area will be considered as irrigated area/district (Both PMFBY/RWBCIS).
  • Flexibility to States/UTs to implement the Scheme with option to select any or many of additional risk covers/features like prevented sowing, localised calamity, mid-season adversity, and post-harvest losses. Further, States/UT can offer specific single peril risk/insurance covers, like hailstorm etc, under PMFBY even with or without opting for base cover (Both PMFBY/RWBCIS).
  • States not to be allowed to implement the Scheme in subsequent Seasons in case of considerable delay by States in release of requisite Premium Subsidy to concerned Insurance Companies beyond a prescribed time limit. Cut-off dates for invoking this provision for Kharif and Rabi seasons will be 31st March and 30th September of successive years respectively (Both PMFBY/RWBCIS).
  • For estimation of crop losses/admissible claims, two-Step Process to be adopted based on defined Deviation matrix" using specific triggers like weather indicators, satellite indicators, etc. for each area along with normal ranges and deviation ranges. Only areas with deviations will be subject to Crop Cutting Experiments (CCEs) for assessment of yield loss (PMFBY).
  • Technology solutions like Smart Sampling Technique (SST) and optimization of number of CCEs to be adopted in conducting CCEs (PMFBY).
  • In case of non-provision of yield data beyond cut-off date by the States to implementing Insurance Companies, claims to be settled based on yield arrived through use of Technology solution (PMFBY alone).
  • Enrolment under the Scheme to be made voluntary for all farmers (Both PMFBY/RWBCIS).
  • Central Share in Premium Subsidy to be increased to 90% for North Eastern States from the existing sharing pattern of 50:50 (Both PMFBY/RWBCIS).
  • Provisioning of at least 3% of the total allocation for the Scheme to be made by Government of India and Implementing State Governments for administrative expenses. This shall be subject to an upper cap fixed by DAC&FW for each State (Both PMFBY/RWBCIS).
  • Besides above, Department of Agriculture, Cooperation and Farmers Welfare in consultation with other stakeholders/agencies will prepare/develop State specific, alternative risk mitigation programme for crops/areas having high rate of premium. Further, as the scheme is being made voluntary for all farmers, therefore, to provide financial support and effective risk mitigation tools through crop insurance especially to 151 districts which are highly water stressed including 29 which are doubly stressed because of low income of farmers and drought, a separate, scheme in this regard would also be prepared.
  • The concerned provisions/parameters of scheme and operational guidelines of the PMFBY and RWBCIS shall be modified to incorporate the above said modifications and shall be made operational from Kharif 2020 season.


With these changes it is expected that farmers would be able to manage risk in agriculture production in a better way and will succeed in Stabilizing the farm income. Further, it will increase coverage in north eastern region enabling farmers of NER to manage their agricultural risk in a better way. These changes will also enable quick and accurate yield estimation leading to faster claims settlement. These changes are proposed to be implemented from Kharif’ 2020 Season throughout the Country.


Weather based Crop Insurance Scheme (WBCIS) is a unique Weather based Insurance Product designed to provide insurance protection against losses in crop yield resulting from adverse weather incidences. It provides payout against adverse rainfall incidence (both deficit & excess) during Kharif and adverse incidence in weather parameters like frost, heat, relative humidity, un-seasonal rainfall etc. during Rabi. It is not Yield guarantee insurance.

Comparison between National Agricultural Insurance Scheme (NAIS) and Weather Based Crop Insurance Scheme (WBCIS)

S.No National Agricultural Insurance Scheme (NAIS) Weather Based Crop Insurance Scheme (WBCIS)
1 Practically all risks covered (drought, excess rainfall, flood, hail, pest infestation,etc.) Parametric weather related risks like rainfall, frost, heat (temperature),humidity etc.) are covered. However, these parametric weather parameters appear to account for majority of crop losses
2 Easy-to-design if historical yield data upto 10 years’ is available Technical challenges in designing weather indices and also correlating weather indices with yield losses. Needs upto 25 years’ historical weather data
3 High basis risk [difference between the yield of the Area (Block / Tehsil) and the individual farmers] Basis risk with regard to weather could be high for rainfall and moderate for others like frost, heat, humidity etc.
4 Objectivity and transparency is relatively less Objectivity and transparency is relatively high
5 Quality losses are beyond consideration Quality losses to some extent gets reflected through weather index
6 High loss assessment costs (crop cutting experiments) No loss assessment costs
7 Delays in claims settlement Faster claims settlement
8 Government’s financial liabilities are open ended, as it supports the claims subsidy Government’s financial liabilities could be budgeted up-front and close ended, as it supports the premium subsidy.

How does Weather Based Crop Insurance Scheme (WBCIS) operate?

Weather based Crop Insurance Scheme (WBCIS) operates on the concept of “Area Approach” i.e., for the purposes of compensation, a ‘Reference Unit Area (RUA)’ shall be deemed to be a homogeneous unit of Insurance. This RUA shall be notified before the commencement of the season by the State Government and all the insured cultivators of a particular insured crop in that Area will be deemed to be on par in the assessment of claims. Each RUA is linked to a Reference Weather Station (RWS), on the basis of which current weather data and the claims would be processed. Adverse Weather Incidences, if any during the current season would entitle the insured a payout, subject to the weather triggers defined in the ‘Payout Structure’ and the terms & conditions of the Scheme.

The “Area Approach” is as opposed to “Individual Approach”, where claim assessment is made for every individual insured farmer who has suffered a loss.

Weather based Crop Insurance Scheme (WBCIS) provides protection to the insured cultivators in the event of loss in crops yields resulting from the adverse weather incidences, like un-seasonal/excess rainfall, heat (temperature), frost, relative humidity etc. Triggers are broadly fixed so as to capture the adverse incidence of weather parameters on crop yield.

Claims arise when there is a certain adverse deviation in Actual Weather Parameter Incidence in RUA (as per the weather data measured at RWS), i.e.,e.g. its “Actual temperature” within the time period specified in the Benefit Table is either less or more compared to the specified “ temperature Trigger”, leading to crop losses. In such case, subject to the terms and conditions of the Scheme, all insured cultivators under a particular crop shall be deemed to have suffered the same “adverse deviation” in temperature and become eligible for claims.

Weather experience (rainfall in particular) on a particular day could be different even in smaller geographical area, but, in a span of a fortnight, month or season it evens out. RWS at Block / Tehsil level, by and large, reflects the weather experience of individual cultivators within a RUA.

For the complete operational guidelines of the Insurance scheme, click here.

Source : Crop Insurance Proqramme - Operational Guidelines.

Related Resources

  1. Insurance Calculator
Channamallikarjuna Dec 26, 2019 10:15 AM

We, black pepper growers of Yeslur hobli, sakleshpur Taluk, hassan District.not received any insurance payments, of 2018 season, until now why so delay?

Ashoka Nov 27, 2019 10:36 AM

Which is last date to pay 2019 _2020 wbcis

Ramlal goyte Oct 19, 2019 12:20 PM

How to take benefits of it.... I payed premium for orange

rajendra agrawal Jan 07, 2019 05:57 PM


Ankit Aug 24, 2018 12:45 AM

How does WBCIS Scheme compare to PMFBY? Do insurance companies have different options for both the schemes?Thank you.

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