The Hindu Business Line : Agriculture Insurance Corpn prices coffee crop premium

The Agriculture Insurance Corporation of India has priced its weather-linked coffee risk cover product at 8 to 12 per cent of the sum assured. The Rainfall Insurance Scheme for Coffee (RISC) is the first of its kind risk cover for a specific commodity.

Sums assured

Speaking to reporters, Mr K. Nageshwara Rao, Chief Manager, AIC, said, the premium has been worked out on the basis of the 30-year, historical rainfall data across 43 different coffee zones. "The maximum sum assured is Rs 20,000 per hectare for the robusta variety and Rs 30,000 per hectare for the arabicas," he said adding the premium varies from region to region.

The Union Minister of State for Commerce, Mr Jairam Ramesh, said the scheme would cover about 85,000 growers in Karnataka, Tamil Nadu and Kerala. "Based on our experience with this scheme, we will cover other plantation crops also," he said.

Subsidies

The Union Government, through the Coffee Board is providing a 50 per cent subsidy on the premiums for small growers, who own estates up to 10 hectares. The Government has earmarked Rs 22.7 crore towards the subsidy component, Mr Ramesh said. But large growers can also take the insurance, which aims to cover the production costs of a coffee grower.

The subsidy on premium would be subject to a ceiling of Rs 2,000 for robusta and Rs 2,500 for arabica per hectare. AIC officials would be using the Coffee Board network to offer the insurance cover. "Our expectation is that 50 per cent of the small growers would avail the scheme this year," said Mr G.V. Krishna Rau, Chairman, Coffee Board.

About 98.4 per cent of coffee holdings in India are small with less than 10 hectares.

Phases of scheme

There are three different phases available under the insurance scheme — blossom showers insurance, backing showers insurance and monsoon rains insurance. "Growers can take cover against all the three triggers or risks, or has the freedom to choose any one or two or all three options," Mr Rau said. The scheme provides for payout against certain adverse deviation in actual rainfall as per the phase, coffee variety and zone.

Growers can purchase cover by end February for the Blossom Showers Insurance and Backing showers insurance, while the cover can be availed till June end for the monsoon rains insurance.

In the current year, growers can avail only the monsoon rains cover, while AIC would start selling insurance for 2008 from December 2007 onwards. Coffee Board will take up an aggressive campaign to create awareness of this insurance product.

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