The Agriculture Insurance Corporation of India (AIC) has reportedly priced its weather-linked coffee risk cover product at 8 to 12 per cent of the sum assured.

K Nageshwara Rao, the chief manager, AIC, told reporters here that the premium has been worked out on the basis of the 30-year, historical rainfall data across 43 different coffee zones.

The maximum sum assured is Rs.20, 000 per hectare for the Robusta variety and Rs.30, 000 per hectare for the Arabicas. The premium varies from region to region.

Union Minister of State for Commerce Jairam Ramesh said the scheme would cover about 85,000 growers in Karnataka, Tamil Nadu and Kerala. He said that the Government through the Coffee Board is providing a 50 per cent subsidy on the premiums for small growers, who own estates up to 10 hectares.

The government has earmarked Rs.22.7 crore towards the subsidy component. But large growers can also take the insurance, which aims to cover the production costs of a coffee grower.

About 98.4 per cent of coffee holdings in India are small with less than 10 hectares. There are three different phases available under the insurance scheme - blossom showers insurance, backing showers insurance and monsoon rains insurance. Growers can take cover against all the three triggers or risks, or has the freedom to choose any one or two or all three options.

The scheme provides for payout against certain adverse deviation in actual rainfall as per the phase, coffee variety and zone. Growers can purchase cover by the end of February for the Blossom Showers Insurance and Backing showers insurance, while the cover can be availed till June end for the monsoon rains insurance.

This is cache, read story here