for coffee growers announced
Coffee Roaster Cups
The Coffee Board
March 24, 2007
Bangalore, Karnataka, India -- The Coffee Board, a
statutory body of the Union Commerce Ministry, Saturday
announced a comprehensive weather insurance scheme for
growers at affordable premium against crop loss due to the
vagaries of monsoons.
Board, a statutory body of the Union Commerce Ministry,
Saturday announced a comprehensive weather insurance
scheme for growers at affordable premium against crop loss
due to the vagaries of monsoons.
The rainfall-linked insurance scheme, to be offered by the
state-owned Agriculture Insurance Company (AIC), has been
devised to protect coffee growers from deviations in
weather (rainfall) resulting in lower yield within a
specific area and period.
It provides payout against deficit rainfall in blossom
showers, backing showers and excess rainfall during the
The coffee rainfall insurance policy will be marketed by
AIC from Monday (March 26) till September this year for
the monsoon rains that occur between July 1 and Aug 31.
As the introduction of the scheme has been delayed at the
central government level, the policy will not be
applicable to blossom showers occurring between March 1
and April 15 for Robusta and from March 1 to April 30 for
Arabica and so also for the backing showers that take
place 18 days after blossom showers begin and 35 days
'The policy will be implemented fully from next year and
growers will have the option to choose any one or two or
all three options for which the premium is worked out
separately for each option,' Union Minister of State for
Commerce Jairam Ramesh told reporters here while
announcing the insurance scheme.
To make the scheme attractive, the Coffee Board will
provide a 50 percent subsidy on the premium amount up to a
ceiling of Rs.2,000 for Robusta and Rs.2,500 for Arabica
per hectare. The subsidy will be applicable only to small
growers with a holding of 10 hectares.
'The finance ministry has made a provision of Rs.221
million per annum towards the subsidy component. It will
offer insurance cover to 50 percent of the area under
small-holding - 116,000 hectares under coffee. The board
will reimburse its subsidy component to AIC directly,
while the grower taking insurance will pay the premium net
off subsidy,' Ramesh pointed out.
The maximum sum assured under the insurance is Rs.20,000
per hectare for Robusta and Rs.30,000 per hectare for
Arabica. The phase-wise sum assured in case of Robusta is
Rs.10,000 for blossom showers, Rs.4,000 for backing
showers and Rs.6,000 for monsoon showers. In case of
Arabica, it will be Rs.16,000 for blossom showers,
Rs.6,000 for backing showers and Rs.8,000 for monsoon
'Since weather plays a crucial role in determining the
yield level, planters have to manage weather risk to
maintain their income steam. Receipt of timely blossom and
backing showers followed by monsoons ensures sustained
Blossom and backing showers occur during summer months and
are often unpredictable. Absence of required rainfall can
cause a crop loss of up to 50 percent,' Coffee Board
chairman Krishna Rao said.
According to AIC officials, the insurance payout will be
made if the rainfall is below 25mm during the period and
full payout if the rainfall is below 5mm in the case of
blossom showers. Similarly, for backing showers the payout
will commence if the rainfall is below 12mm during the
period and full payout if the rainfall is below 5mm.
In the case of monsoon showers, the payout will take place
if the daily rainfall is more than 25mm consecutively for
seven days during the period.
'The rainfall insurance is available for Robusta and
Arabica in all the coffee zones in Karnataka (23 zones),
Kerala (11 zones) and Tamil Nadu (9 zones). The premiums
charged vary across the type of coffee (Arabica or
Robusta) and across different zones on account of
differences in rainfall patterns, distribution and the
risks,' a company official said.