Agri Business

Why growers of plantation crops need weather-based insurance

Vishwanath Kulkarni V.Sajeev Kumar Kochi/Bengaluru | Updated on September 09, 2020

Erratic climate pattern taking a toll on producers of tea, coffee, rubber

Till July end this year, key plantation districts across South India such as Kodagu, Chikkamagalur, Idukki and Wayanad faced a rainfall deficit. Come August, the heavy downpour in the first fortnight helped wipe out the deficit besides triggering flooding, landslides and inflicting crop losses in some of these districts.

For plantation districts in South, August has turned out to be a dreaded month with several regions witnessing heavy rainfall and flooding for the third consecutive year. Growers attribute such extreme weather events to climate change and are seeking some sort of protection to their crops in the form of an insurance cover. In Assam, heavy rain and flooding has hit output this year.


“As the freak weather is becoming a new normal, the government should extend the Fasal Bima scheme to plantation crops,” says KK Vishwanath, a coffee and pepper grower in Kodagu. Insurance schemes for coffee, introduced some years ago, had failed to take off. The declining rainy days during the year has become a worry for tea growers in Tamil Nadu and Kerala.

Rainfall deficit

In Nilgiris, the rainy days have reduced from around 110 to 90 days a year over the past decade. “We receive almost the same amount of annual rainfall (1,100 mm), but in fewer days and this heavy intensity rainfall poses a big risk as it has been resulting in flooding, erosion of soil and landslides,” said HE Sivan, Founder President of the Nilgiris Nelikolu Micro & Small Tea Growers and Farmers’ Development Society (NSTF).


Besides, tea growers also face rising instances of frost and drought-like situation due to prolonged dry weather. “The red spider mite, which flares up due to dry weather sucks the sap from both tender and maintenance leaves, is increasingly becoming a problem for the tea growers as it hurts the quality of the crop,” said N Lakshmanan Chettiar, a senior planter in Coonoor. “There is a need for insurance cover for both climate and price risks,” he adds.


Currently, plantation crops are not covered under the government’s crop insurance schemes despite the fact that the sector has been under serious crisis due to factors related to climate, trade policy and other social issues like labour scarcity, productivity challenges etc.


Indira Devi, former director of research, Kerala Agricultural University pointed out that there are few schemes that are weather based which address crop loss due to climate changes. However, it is important that the sector be protected against the risks that it suffers - both due to biotic and abiotic factors. The income loss in the sector is more due to price factors that are more influenced by international forces and trade policies. So it is important that the insurance design addresses these aspects too, she said. The pilot scheme of Revenue Insurance Scheme for Plantation Crops (RIPC) to protect growers of tea, coffee, rubber, cardamom and tobacco from the twin risk of weather and price arising from yield loss due to adverse weather parameters, pest attack, which was supposed to be implemented in 2016-17 never took off for various reasons.

A cardamom planter in Idukki highlighted the practical difficulties in launching an insurance scheme, considering the crop’s high value and productivity especially in vast stretches of land that the majority of farmers take on lease. Land ownership issues have hindered smooth implementation of insurance schemes. As per official statistics, around 75,000 hectares of land have been used for cardamom cultivation in Idukki.

Insurance in rubber sector

Previously, there was a rubber plantation insurance for immature and mature plantations implemented by the Rubber Board in association with a public sector insurer.

The Rubber Board would deduct premium from subsidy given to growers and transfer the collected amount to the insurance company. “As the subsidy scheme discontinued, this process had its natural ending,” sources said.

Generally, farmers do not take the initiative in joining insurance schemes. Only those who have cultivation in terrains and more susceptible to natural calamity would prefer to get their crop insured. The lower participation of farmers for insurance schemes may also be a reason for crop insurance not taking off in the rubber sector.

Plantation crops, mainly spices, are being notified under Restructured Weather Based Crop Insurance Scheme (RWBCIS). The scheme covers selected localised calamity covers under Individual Approach as well as adverse weather incidences under Area Approach. The crops and spices notified under RWBCIS are areca-nut, nutmeg, cocoa, cardamom, cashew, sugarcane, pepper, ginger and turmeric. In Kerala, weather-based crop insurance schemes are gaining acceptance on account of its unique cropping pattern. The diverse agro-ecology of the State also favours such schemes, an official said. For cardamom, a separate scheme on weather based lines coupled with individual cover is on the cards. It is being implemented jointly with the Spices Board which envisages 75 per cent premium subsidy to be shared by central and state governments.

“We are also in the process of re-introducing RISC by seeking suggestions from stakeholders including farmers. It will be purely a weather-based product providing indemnity against uncertainties in the blossom, backing, monsoon and post monsoon rainfalls”, officials said, adding that the much accepted Rubber Plantation Insurance (RPI) is also on a re-launch mode.

Tea cover

While there have been several rounds of discussions regarding the need for having insurance coverage for tea to cover any possible loss in production of crop or loss in profitability due to lower crop, however, nothing much has happened on the ground, said industry insiders. DP Maheshwari, MD and CEO, Jay Shree Tea, siad that although there was some coverage which was conceived a couple of years ago for tea, there is no insurance scheme in vogue to cover loss in crop at present.

“As planters we do not have any control over tea prices and it is dependent on demand and supply. So it is fairly complicated to work out an insurance scheme,” he said.

Atul Asthana, MD and CEO, Goodricke Group Ltd echoed the same views. “It is a complex thing (to have an insurance cover for tea). Everybody has talked about it but nothing really has happened so far,” he said. However, Indian Tea Association feels there is a need for an insurance scheme for the tea industry to protect planters from loss of crop due to climatic vagaries. “It is a very good thought we should explore this moving forward,” said Vivek Goenka, Chairman, ITA.

(With inputs from Shobha Roy in Kolkata)

Published on September 09, 2020

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