Insurance scheme may not see an uptick in demand this year too

Despite being badly affected by last year’s unseasonal rainfall, coffee growers in the country are still sceptical about the rainfall insurance scheme for coffee (RISC). “The first phase of receiving insurance applications for this year was held between February 23 and 28. It did not receive a great response as growers are a still a little unsure about the scheme,” said Sudarshan AC, secretary of the Coorg Planters Association.

The Coffee Board had late last year revised the coffee production estimates by 5.6% to 2,76,600 tonne for the current crop year and indications are that a further cut in estimates is expected in the coming days.

The year is divided into three phases — blossom showers trigger, backing showers trigger and monsoon showers trigger for different periods of the year. According to an official from Karnataka Planters Association (KPA) the first phase this year saw only 344 new applicants. South India has over 1.5 lakh coffee growers. However, S Radhakrishnan, deputy director (Market Research), Coffee Board said, “It’s too early to comment on what the response will be for RISC this year as the initial phase only just ended. The scheme is only two years old and will take more time before awareness levels increases and many people take to the scheme.”

RISC was launched in 2007 by the Agriculture Insurance Company of India in consultation with Coffee Board, Central Coffee Research Institute and the coffee growers. The product is specially designed for the coffee growers of Karnataka, Kerala and Tamil Nadu. In 2007, around 12,300 planters opted for the scheme while last year 8,400 planters took the scheme. On contacting the Agriculture Insurance Company of India officials, they said that they would not like to comment on the expected response to the scheme.

According to some planters, the management of the scheme is not very organised and believe that they were not adequately compensated last year. “With very few people taking to the scheme, it’s difficult to fully compensate all claimants. There were some who did not receive what they thought they deserved as compensation under the scheme,” said Coorg Planters Association’s, Sudarshan AC.

Another issue that is worrying growers is that there are not enough weather stations to judge the extent of rainfall received based on which the compensation is made. “Different parts of the coffee growing regions receive varying amounts of rainfall. With very few weather stations present the calibrations taken from these few areas are not representative for all coffee growing areas,” said coffee grower CM Pemmaiah. According to KPA, the Coffee Board has taken the issue of setting more weather stations seriously and this might in future lead to more people taking up rainfall insurance. The Indian Space Research Organisation (ISRO) plans to set 15 Automatic Weather Stations (AWS) in different parts of Coorg district soon.

Some planters also find objectionable the conditions that have to be fulfilled to receive compensation calling it unreasonable. “There are several anomalies in the RISC. For instance, it does not account the damage caused due to unseasonal rainfall and only crops damaged by seasonal rainfalls are taken into consideration for compensation. Also, stringent conditions like receiving seven consecutive days of rainfall during the monsoon showers to avail the compensation makes the scheme unattractive,” said Ajoy Thipaiah, chairman KPA.

Industry insiders also say that coffee growers do not understand the insurance scheme in totality and have more pressing issues to deal with. They add that the culture of taking rainfall insurance has not set in as yet as the scheme is still two years old and will need more time for a large mass to adopt the scheme. The Agriculture Insurance Company of India has entered into a tie-up with India Post as a corporate agent, to market RISC through post office branches spread across the three coffee growing districts of the state.  The Agriculture Insurance Company of India targets to insure 15,000 planters covering 50,000 hectares this year. However it’s still unclear if the target will be achieved.

Pranav Nambiar / DNA-Daily News & Analysis Source: 3D Syndication