India coffee growers await rain cover

The Union Cabinet has to clear it at the latest by the end of this month if the scheme is to be implemented for the next crop. Plucking of Arabica beans begins in November-December and Robusta harvesting ends a few months later.

Had the scheme been implemented for the current crop, coffee growers who had to contend with 62 days of continuous rain in the traditional areas during the monsoon season could have received a payout well in excess of not just the unsubsidised premium for the monsoon (from July 1 to August 31) but also the cumulative premium for all periods including blossom showers and backing showers (a duration of 17 to 35 days after the completion of blossom showers).

This is why coffee growers are hoping that Cabinet clearance will come through before the end of this month so that the implementing agency of the Agriculture Insurance Company of India (AIC) and the Coffee Board will at least have February to sell the scheme in the traditional areas where almost all of coffee is grown.

Blossom showers begin on March 1.The scheme has been developed by the AIC over the last 12 months in consultation with the Coffee Board and growers. The rationale was that rainfall was the one factor over which growers had no control and hence needed protection against since the crop could be affected by trigger events like deficit rainfall during the blossom showers and the backing showers and excess precipitation during the monsoon.

Growers can cover themselves against either blossom, backing or monsoon showers or all three of them. The total sum assured can go up to Rs 30,000 per hectare (ha) of Arabica and up to Rs 20,000 per ha of Robusta. With over 98% of India's coffee cultivators being small growers, the scheme has an element of subsidy.

For small growers taking a premium of between Rs 1,000 and Rs 2,000, the amount over Rs 1,000 is subsidised. Above Rs 2,000, there is 50% subsidy. The traditional areas have been divided into 43 zones based on historical rainfall patterns and the premium fixed accordingly.

Says Coffee Board grower-member Anil Bhandari, "The scheme has to be implemented for the next crop. Any delay could seriously impact India's 178,308 coffee holdings which have still not recovered from a five-year period from 1999 to 2004 when their realisations plummeted to below the average cost of production due to a global surplus and with 75% of India's crop exported."