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Crop insurance fails to ease climate burden of India's poorest coastal farmers

by Stella Paul | stellasglobe | Thomson Reuters Foundation
Monday, 3 March 2014 11:32 GMT

Many of the most impoverished, marginalised farmers on the Andhra Pradesh coast don't have crop insurance, or say payouts take too long to arrive

SRIKAKULAM, India (Thomson Reuters Foundation) - This January, rice farmer Kambapu Apparasu, 37, didn’t celebrate Sankranthi, the harvest festival.

“There was nothing to celebrate - I didn’t harvest even a handful of rice,” said Apparasu, who owns a 3.2 acre farm in Chillapetarajam. His coastal village in the Indian state of Andhra Pradesh was battered by Cyclone Helen last November.

“We fled the village to save our lives. When we returned after four days, my ripe paddy plants were underwater,” said the farmer. He usually harvests 100-140 quintals (10,000-14,000 kg) of rice each year.

This is just one of the many losses Apparasu has faced in the past two years. In November 2012, his crops were ravaged by another severe storm. “I am devastated. It’s like destiny is playing a cruel joke on me,” he lamented.

Farmer Sai Prasanna of Allavaram village in the neighbouring district of East Godavari also lost his paddy crop of six acres to Cyclone Helen.  

But unlike Apparasu, Prasanna is expecting the government to pay for the damage, estimated at 100,000 rupees ($2,000), thanks to a weather-based crop insurance scheme he had earlier signed up for.

Andhra Pradesh has a 970 km-long coastline, which is known as the most vulnerable part of India to storms coming off the sea.

Since 2000, the state has offered crop insurance - a service currently used by 7.2 million farmers in 22 districts. It covers a range of food crops including paddy, maize, millet, pulses and nuts, as well as non-food crops like sugarcane and cotton.

Hanumantha Bodapati, a salesman at the Life Insurance Corporation of India, says participation in the insurance scheme is a must for farmers seeking a loan to buy seeds or farm equipment.

For one thing, it helps minimise farm suicides. “Unpaid loans have forced many farmers to commit suicide. Now the insurance company will pay their loans to the bank,” Bodapati said. 

As an incentive, the government subsidises up to 50 percent of the insurance premium, he added.


But some farmers in the coastal belt reason that disasters, especially cyclonic storms, are just too frequent to deal with, and insurance payouts are too slow. 

Appa Rao, a farmer from Gunabhadra village in Vizianagaram district, described insurance schemes as “feeble efforts to stop a flooding river with straws”.

“The insurance sum takes about a year to reach a farmer. By the time the money for one cyclone comes, the farmer has faced a couple more. This forces him to take loans from private money lenders for survival. It’s like a never-ending tragedy,” said Rao.

According to Rama Naidu, an executive at Deccan Grameena Bank, one of the government-owned banks that handle insurance compensation, payment takes eight to 12 months. “This is standard procedure,” he said.

Government records attest to an increasing number of cyclones. For example, in the past four decades, Andhra Pradesh witnessed more than 60 cyclones, but in 2013 alone, it was hit by four severe storms: Mahasen, Phailin, Helen and Lehar.

Helen caused crop losses on a staggering 9.2 million acres, according to the government. Although the cost of crop damage from all four cyclones has not been assessed, it is expected to surpass the sum paid to settle claims in Andhra Pradesh in 2012, which the Agriculture Insurance Corporation of India put at 28.8 billion rupees (around $450 million).

Nationally, natural disaster losses equal as much as 2 percent of India’s gross domestic product (GDP) and up to 12 percent of government revenue each financial year, according to the National Cyclone Risk Mitigation Project run by the National Disaster Management Authority.


As the number of disasters increases and their effects multiply, the central government is trying to simplify insurance mechanisms.

In November, it formulated the National Crop Insurance Program (NCIP), an umbrella scheme bringing together a number of insurance efforts, including the Pilot Weather-Based Crop Insurance Scheme, the Modified National Agricultural Insurance Scheme and the Pilot Coconut Palm Insurance Scheme.

But Poguri Chennaiah, president of Andhra Pradesh Vyavasaya Vruttidarula Union (APVVU), a farmers’ organisation, said farmers in the state are still asked to file separate claims for different crops.

“These days, most farmers are growing more than one crop, but few of them are aware of which crop is covered by which insurance scheme,” he said. “The NCIP is supposed to take care of that, but the local government is yet to implement it.”

Some blame the current political instability in the state, which is soon to be divided to create another new state called Telangana.

“For over two years now, there has been a partial lockdown. From the MPs and ministers, to the clerks in the government, all are embroiled in the debate on the (state’s) bifurcation,” said Gurram Vijay Kumar, vice-president of Rythu Coolie Sangham, a union of landless farmers.

“Now that the state is actually going to be divided, we don’t know how long it will take for the (insurance) files to be transferred and reopened,” he added.


Though the cyclones have hit both rich and poor, lower-caste dalit and tribal farmers say they have been more affected than others.  

Ishwar Rao, a 27-year-old millet farmer from Mallampeta village in Vishakhapatnam district, said his entire field was “flattened” by Phailin. “Everyone in my village lost his crop, but we have never heard of crop insurance,” he said.

Mopidevi Vijaya Nirmala, council head in Nizampatnam, one of the most vulnerable coastal villages, said cyclones and crop damage are triggering migration among marginalised people in her village.

“Thirty dalit families from my village have migrated to the city in the past year. They have either less than 2.5 acres, or no land of their own. How could they afford to wait for the compensation package to come?” she asked.

Podela Suridimedu, a farmer and activist from Dalit Bahujan Front, a rights group, argued that a “quick, fast-track compensation package”, together with zero-interest loans, could help the poorest farmers.

“We can’t stop the cyclones, but we can certainly try to minimise the sufferings of their victims,” he said.

Stella Paul is a multimedia journalist based in Hyderabad, India.

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