After launching an ambitious crop insurance scheme – Pradhan Mantri Fasal Bima Yojana – the Centre is now turning its focus on covering the risks of the plantation sector.

A market-linked insurance scheme for plantation crops such as tea, coffee, rubber and spices, is being worked out to protect growers of these crops against price and yield fluctuations. The scheme may also include tobacco.

Revenue insurance scheme The scheme, to be called ‘Revenue Insurance Scheme for Plantation Crops’, is being formulated by the Commerce & Industry Ministry and will be first implemented on a pilot basis in seven districts, a government official told BusinessLine. 

PSF funding “The scheme will be funded from the Price Stabilisation Fund (PSF) for plantation crops which has not taken off due to a number of weaknesses,” the official said.

For instance, the PSF was not linked to landholdings and would kick in only when prices fell below a certain percentage of average prices prevailing over the past few years.

Growers had complained that it had stringent criteria for determination of distress.

“The new insurance-based scheme that is being formulated will insure the plantation growers against both price and yield fluctuations. The proportion in which the premium will be shared by producers and the government is being worked out,” the official said.

Growers of plantation crops such as rubber, coffee and tea are highly vulnerable to the volatility in global prices and have been reeling under the impact of the sharp price fluctuations since past few years.

Weather-based scheme Though the government had introduced a weather-based crop insurance scheme for the coffee growers to cover the yield risks, the scheme has not been largely successful, despite being highly subsidised by the government for various reasons including lack of adequate awareness, complex methodology and poor payouts. “We have been asking the government to cover the risks faced by the plantation owners. Any scheme that covers both price and yield risks is a welcome move,” said Ullas Menon, Secretary-General of the United Planters Association of India (Upasi).

Menon also said that all category of growers – both small and large –should be included in such schemes.

Crop insurance Finance Minister Arun Jaitley has allocated ₹5,500 crore in the Budget for the roll-out of Pradhan Mantri Fasal Bima Yojana that seeks to not only reduce the premium burden on farmers but also ensures early settlement of claims for the sum insured.

All food crops including cereals, millets and pulses, oilseeds, annual cash crops and horticultural crops would be covered under the PMFBY that will be rolled out from the forthcoming kharif season in June.

Source - thehindubusinessline.com