Impact of rubber plantation insurance scheme in traditional rubber growing tracts of Kerala

Abstract

The study on the ‘Impact of rubber plantation insurance scheme in the traditional rubber growing tracts of Kerala’ has revealed that the scheme, being a recently introduced subject, has not gained much popularity. The ongoing scheme had covered only seven per cent of the total rubber area in the State, for the period upto 1994. Out of this, the percentage share of immature area is 22 and mature area a meagre two per cent. It was also observed that the scheme is highly solvent and profitable from the angle of the insurance company, in that the company had paid as compensation only 27 per cent of total premium amount collected. Thus the insurance company was left with a surplus of 73 per cent of the total premium collected, excluding the possible interest accrued on the same periodically. It was found that in mature as well as immature plantations, the major causes of damage was wind/storm. Damages due to agencies like fire, flood, lightning and drought were very minimal. The limitations of the scheme were found to be less coverage, the arbitrary franchise limit, lack of provision for payment of compensation for loss of prospective yield and lack of no claim bonus. Considering the solvency there is scope for further reduction of premium, including perils like drought permanently, considering for yield loss due to diseases etc. One of the reasons for low insuring in mature area is because of lack of any promotional effort by insurance companies. The field survey was extended to 50 insured units only in the Thrissur district out of 1398 units insured. Moreover, the rubber holdings insured in traditional rubber growing tracts of Kerala are spread over to 30235 units in 14 districts. To have an indepth analysis on the impact of the scheme, further studies covering the entire tract is necessary. Highlights of the study The scheme, even after seven years of its launching, had benefited only a small percentage of growers in the traditional rubber growing tracts of Kerala. More awareness campaign among small and marginal farmers, especially who own mature uninsured rubber areas, will be of much use. Insurance cover provided for different perils other than wind/storm, fire, lightning and land side reflects academic coverage only. The insurer is financially benefited by the scheme as the situation stands now. The stand per hectare now in vogue requires upward revision atleast in the immature phase. Considering the solvency there is scope for further reduction of premium.