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P.T. Jyothi Datta
Radhika Menon

Mumbai, March 10 Even as the Centre runs a campaign to stub out tobacco consumption in the country, it is set to provide a subsidised insurance cover for this crop. A first time for tobacco, the Government has included it in this year’s Budget list of crops that will be eligible for specialised insurance covers.

But, the proposal comes at a time when the Centre (albeit through its Health Ministry) has been active in curtailing the promotion and consumption of tobacco products. It has stepped up efforts to get large pictorial health warnings on cigarette and beedi packs, besides clamping down on surrogate tobacco advertisements.

Crop-insurance for tobacco has been consistent with the Government’s policy of supporting farmers, observes Dr Srinath Reddy, Cardiology Professor with the All India Institute of Medical Sciences and President, Public Health Foundation of India.

However, instead of encouraging tobacco farming, the Centre should have given a policy direction to help tobacco farmers shift to other crops, he said.

Tobacco is “a political and emotional crop” and there are several issues to be looked at before designing an acceptable insurance cover for tobacco, points out an ICICI Lombard official. Two years ago, ICICI Lombard had started a tobacco insurance pilot in Andhra Pradesh for ITC. But, the official said, the pricing of the product was considered to be high.

Following up on the Budget proposal for tobacco, state-run Agriculture Insurance Company is working on a tobacco insurance product. The company is working with the Ministry of Commerce and Industry to design insurance covers for tobacco and other plantation crops and spices.

The premium subsidy will be around 50 per cent. Insurance would cover the replanting cost as well as the loss of income, a source said.

Confronting the health-challenge and explaining the contradiction of health curbs versus increasing demand, the Central Tobacco Research Institute’s (CTRI) Director, Dr V. Krishnamurthy, said that they were developing alternative tobacco-related products.

Solanesol, extracted from tobacco, has anti-cancer, ageing and diabetes properties, he said. It has been patented by CTRI last October and is getting exported to Japan and the US.

Pure nicotine, from the beedi tobacco leaf, is also shipped to the pharmaceutical industry in the US. CTRI is also working on edible oil from the tobacco seed, by refining it. The product should be available in a couple of years, he said.

The demand for tobacco is on a rise, with worldwide cultivation decreasing. Earlier this week, FCV tobacco (used in cigarettes) got its highest ever price of Rs 95.40 per kg (compared to the regular Rs 50 per kg), propelled by demand, he said.

With a production of 700 million kg per year, India ranks behind China and Brazil. Tobacco contributes about Rs 7,000 crore in excise, and forex earnings from the crop are projected to touch Rs 2,000 crore this year, he said.

More Stories on : Tobacco | General Insurance

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