1. INTRODUCTION:

Maharashtra covers 70% of the total area under grape in India mainly through its districts of Nasik, Solapur, Sangli, Pune and Ahmednagar. Out of this around 60% to 70% of the seedless grapes are produced in Nasik district alone. The Sangli, Solapur area is a dry belt where grapes are mostly converted to raisins. The climate of Nasik is relatively cooler and suitable for cultivation of quality grapes. Although Nasik district comprises of 13 talukas, only 7 talukas have the major share and amongst those the three talukas viz. Nasik, Niphad and Dindori are the leading growers. Therefore, this cluster of district encompasses 90% of the grape cultivation. For last 20 years, grape has acquired dominance in the Agricultural economy of the district.

Graph - 1

The grape area in Nasik District is a naturally developed cluster due to the agro-climatic conditions and easy availability of related inputs. The water availability from five rivers, the dams and the flowing canals had earlier induced the farmers to go for sugarcane crop. The establishment of sugar factories and related infrastructure in this area made the cultivation of sugarcane easy with assured sale proceeds. But the progressive farmers of Nasik were not satisfied with the income from sugarcane crop, which was a heavy water consuming one.

At the same time area under chilly and turmeric was also reduced and the high yielding varieties of grapes made an attractive proposition. The Nasik farmers developed the expertise in producing quality grapes. The grapes from Nasik thus offered premium price in domestic and international markets. Nasik is also well connected by national highways leading to Northern and Southern Indian markets. Thus the favourable agro climatic

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conditions, good infrastructure and nearness to the Mumbai market promoted the grape-growing cluster of this area.

Description of commercially grown varieties:

Table 1.1

Name of the variety Description Berry diameterThompson Seedless Berries are oval to oblong in

shape withT.S.S.18-22o Brix, acidity 0.5 to 0.7%.

16 mm to 18 mm

Sonaka Berries are elongated, cylindrical and amber coloured,T.S.S. around 22 o Brix,acidity 0.4-0.7%

16 mm to 19 mm

Sharad Seedless Berries are oblong to elliptical in shape and bluish black in colour with T.S.S. 18-21o Brix and acidity 0.5-0.7%

18mm to 22 mm

Tas-e-Ganesh Berries are ovoid shaped and green to amber in colour with T.S.S. 20-22 o Brix and acidity 0.5-0.65%

15 mm 20mm

Concentrated pockets

The production of grapes in Maharashtra is concentrated in:1. Nasik2. Sangli3. Solapur4. Osmanabad5. Pune6. Satara7. Ahmednagar

1.1 SCOPE:

Maharashtra is the major grape growing state in India and grape is considered as one of the important commercial fruit crops of the state. The cultivation area under grape in Maharashtra is estimated to be around 65,000 H.A. with the production of approx 0.556 MMT. The grape

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coverage is increasing constantly due to introduction of new cultivation practices and progressive nature of the farmer. This study is conceived to devise a strategy for successful implementation of the Grape Insurance Scheme-2010.

1.2 OBJECTIVES :

1. To study the grape cluster in the sample area i.e. Nasik District regarding the problem confronted by the Grape growers relating to weather & diseases.

2. Understanding the present structure of credit flow to the farmers & the role played by various Govt. & Non- govt. organizations.

3. Expectations of the grape growers from the Insurance scheme & the price band to be paid by the growers.

4. Recommendations

2. Field Survey of Nasik:

Nasik is one of the premium contributors regarding grape production & the presence of prominent institutional organizations i.e. Maharashtra Rajya Draksha Bagitdar Sangh, Ojhar, MahaGrapes, Niphad, National Horticulture Board Office, District Superintendent of Agriculture. These all ensures the importance of Nasik as an important cluster for the study.

The regions under the study are the major grape producing regions of which Sinnar, Niphad, Nasik are the regions which have substantial no. of both Table & Wine Grape growers. These clusters differed in the amount of rainfall & incidents of hailstorms & diseases which made the insurance rather a hybrid insurance i.e. weather hedging as well as against diseases. Individually, the perception of the grape growers towards the insurance was an optimistic one & they considered this scheme as a welcome steptowards hedging them against the loss incurred due to wrath of nature.

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Generalized flowchart for Grape production & processing:

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LAND

Labour

Farm machinery

Irrigation Water

ChemicalsFertilizers

FYM/Compost

Growth Regulators Vineyards

Pruning

Girdling

Thinning

G A Treatment

Insecticides / Pesticides

Wine MakingPacking (Table grapes)

Raisin Making

Retailer

Harvesting

Packing

Consumer Trader

Distributor

Cold Storage

Consumer

Export Market

Domestic Trader

Super Market

Trader

Consumer

Grafted Seedlings/Root Stock

Precooling

Consumer

2.1 An overview of the sample regions of the study:

2.1.1 Niphad:

1. Niphad (Marathi: नि�फा�ड) is the name of a town, and of the taluka headquartered there, in the Nashik District of Maharashtra, India. The Marathi name signifies a place without mountains; indeed, the taluka's topography is fairly level with hardly even any hills. Located northeast of Nashik proper, the taluka borders Sinnar, Nashik, Dindori, Chandwad, and Yeola Talukas and Ahmednagar District and has no direct ocean access. Niphad Sub-Division comprises Niphad, Sinnar, and Yeola Talukas.

2. The town remains the local Transportation and Communication Hub as well as the seat of Government and law enforcement with Additional District Courts serving Niphad, Yeola and Pimpalgaon Baswant courts.

Overview:

1. Avg. land holding : 10 acres2. Avg. production : 8-10 tonnes/acre

3. Varieties : Thompson(seedless) ,Sharad Black, Cabernet ,Sonaka

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4. Risks : The main problems regarding the grape cultivation are: (a)Unseasonal rainfall during flowering & berry setting (b)Hailstorms

(c)Downy Mildew

5. Awareness about Grape insurance: Majority of the growers were not aware about the scheme & the minority had a vague knowledge of the scheme through Newspapers & fellow farmers.

6. Expectations: Grape growers expected the hybrid product i.e. hedging against risk of weather & diseases.

7. Premium: Growers were ready to pay premium within price band of Rs.3000- 5000.

2.1.2 Dindori:

Dindori (Marathi: दिं��डरी� is a town and taluka in Nashik District in the Indian state of Maharashtra.

Dindori is known for its grape farming. Dindori is also the center for spirituality by "Swami Samarth Kendra" which is driven by the Annasaheb More.

Overview:

1. Avg. Land Holding: 8-10 acres2. Avg. Production : 9-11 tonnes/acre3. Varieties : Thompson(seedless), Sharad

Black 4. Risks : Main problems are

(a) Unseasonal rainfall during flowering & berry

Setting (b) Downy Mildew

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5. Awareness about Grape insurance: Majority of the growers was not aware about the scheme & the minority had a vague knowledge of the scheme through Newspapers & fellow farmers.

6. Expectations: Grape growers expected a hybrid product at affordable premium.

7. Premium: Growers were ready to pay premium within price band of Rs.2000 - 5000/acre.

2.1.3 Sinnar: Sinnar is a taluka (tehsil) in Niphad subdivision of Nashik District in Maharashtra, India. This region contributes majorly to the wine grape production.

Overview :

1. Avg. Land Holding: 10acres

2. Avg.Production : 10-12 tonnes/acre

3. Varieties : Cabernet Black, Thompson Seedless, Sonaka, Shiraz

4. Risks : The main problems are: (a) Unseasonal Rainfall

(b) DownyMildew

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5. Awareness about Grape insurance: Majority of the growers was not aware about the scheme & the minority had a vague knowledge of the

scheme through Newspapers & fellow farmers.

6. Expectations: Grape growers expected a hybrid product at affordable premium.

7. Premium: Growers were ready to pay premium within price band of Rs-5000- 8000/acre.

3. Research Methodology :

The approach adopted for the study was Judgmental (non-probabilistic).This research was an exploratory research. A sample size of 100 farmers was taken & the research was carried out through a self made questionnaire. The judgmental approach ensured an efficient & timely collection of required information.

4. Agriculture Scenario with respect to Grapes

Nasik has total area of 15530 Sq. K.M, of which 42000 Ha (approx.) is under Grape cultivation. The variety of grapes includes both the Table & wine varieties.

4.1 Varieties of grapes Cultivated :

There are approximately 7 varieties of grapes grown in Nashik viz.

Table Variety:

1. Thompson Seedless,2. Tas – A – Ganesh,3. Sonaka,4. Manik Chaman,5. Sharad Seedless,6. Jumbo Seedless7. Black Sonaka

Wine Variety:

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White Wine Varieties: Sauvignon Blanc, Chenin Blanc, Viognier, Riesling, Muscat, Rousanne, found promising and being utilized by commercial wineries inNashik. Red Wine Varieties: Cabernet Sauvignon, Cabernet Franc, Syrah/Shiraz, Merlot, Zinfandel, Malbec, Pinot Noir, Grenache, Tempranillo.

Table – 4.1Variety Share

Thomson Seedless and its mutants (white, seedless) 55 – 57%

Bangalore Blue Syn. Isabella (black, seeded)

Anab–e – Shahi (white, seeded)

17 – 18%

13 – 14%

Perlette (white, seedless) 6%

Gulabi Syn. Muscat Hamburg (purple, seeded) 3%

Bhokri (white, seeded) 1 – 2%

Sharad seedless – a mutant of Kishmish chorni (black, seedless)

Flame seedless (red, seedless)

2%

1%

% Share of varieties grown in India (source- Rabobank, industry note 2005)

4.2 Method of Production:

Table – 4.2

pH 7-9EC (mmhos per cm) 0.3-4.0ESP present 12-48Organic Carbon % 0.4-12EC (me/100g) 20.0-48.0

Soil Characteristic

4.2.1 Agricultural Practices:

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Nursery procedure starts in the month of October. Branches are kept in a given

Seeding treatment, in 21 days it starts growing and after 3 months nursery isdeveloped.

In the month of January digging and cultivation of land is done. LandDevelopment, distance should be 3 by 2 meters, or 2.5 by 1.5 meters.

The land is dug, Phosphorus and Compost manual is put along with that drip irrigation is

given.

Re-plantation of nursery plant is done in January and in the same period fertilizer, fungicides, Insecticides, pesticides and hormonal treatment is followed. In January the temperature rises and so the plant grows.

Till June end, the plant becomes fully mature and from 15th September to 30thOctober (October Pruning), there is a Need of temperature plus humidity sopesting, use of hydrogen cynamide for Dormancy break and after 8 to 10 daysplants start sprouting. After bunch is seen coming out GA3 treatment is given.

In one bunch 200 to 1000 flowers are there, flowers start developing male flowers looses and female flowers (healthy) are stuck. In one bunch 200, to 400 berries are left. Treatment of GA3 to these berries is given, i.e. dipping process.

After treatment cell division starts, 100, 200 and so on. Cell division is for 10

days. Out of 200 to 400, berries only 100 to 200 are kept on these berries 2nd

dipping is done 3rd dipping is done.

Now, cell division stops after 13 days, after 15 days, once again dipping of GA3

is done.

After this treatment, there is elongation of cells for 92 to 100 days. Berries starts

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developing. Till 100th day the size of 1 berry is 15 to 16 mm.

Then, after 115 days to 120 days berries starts becoming soft, hard berry becomes

soft. That is development, of Traci Acid (thermocol).

After 120 days berries starts developing and there is increase of sugar and water

content level in the berries.

The leaves starts photosynthesis process on large amount, so there is production

of glucose (sugar). From 135 to 150 days fruits start developing, from 150th day

harvesting is done. At that time, the age of plant is 1 and half year. Rest is given to the plant for 15 to 20 day. Only water is given to the plants. Again from 1st April to 15th April, hard cutting of cane is done the temperature in April is about 40o C, humidity is also less, because of this, without treatment Plant start sprouting.

There is re-growth of cane or there is development of cane, and 30 to 40 cane are

left on one plant. Each leaves and cane are joint; there is development of bud from 45th to 60th day.

There is development of fruit in that bud, after 90 to 120 days, there is use of

fertilizer.

15th July to 15th august, cane becomes mature. Then again mature cane is cut on 7 to 9 bud and again sprouting is there. And that is October Pruning.

4.2.2 Period of growth stage: Foundation pruning: March – April Shoot growth Period: April – June Fruit Bud differentiation: May Shoot Maturity: July – August Pruning for cropping: September – November Fruit set: November – January

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Veraison: January – March Harvest: February – May

Dormancy – No dormancy

4.2.3 Area and Production of Grape: Grapes are cultivated in an area of 64.3 thousand ha with a total production 1,630.7 thousand tons and productivity of 25.4 tons/ha and the area under grape has increased substantial over the years.

Graph - 2

Source: Yes Bank Limited

Because of special arbor training systems provided for grape cultivation in India, productivity is one of the highest among the grape growing countries of the world.

Graph - 3

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Source: Yes Bank Limited

Maharashtra is a leading state in production of grapes in the whole country. With regard to agricultural land under grape cultivation and grapes production, Nasik and Sangli districts are at forefront in the state.

Graph - 4

Source: Yes Bank Limited

Apart from these, grapes are also grown in the district of Ahmednagar, Pune, Satara, Solapur and Osmanabad. Nowadays, grapes are produced in Latur district of Marathwada also.

Graph - 5

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4.3 Grape Value Chain

4.3.1 Key stakeholders in value chain and their activities

In a typical value chain, involving the table grapes, the farmer takes his produce in tractor /truck /tempo /jeep to the market. The vehicle is either owned by the farmer or rented. Some commission agents working in villages provide credit or advance to some farmers and tie up with the farmer for marketing of their harvest.

Grape Value ChainMany a times, they have long standing relationship with the producer. The commission agents take 7% commission of entire value of produce and deliver

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Producer

Grower / Exporter

ImportConsultant

EurepGAP

cash payment to the farmers, the trader pays 1.05 % commission as a market fee to Premium Market fresh Pvt. Ltd, who runs the Nasik Terminal Market. The trader arranges for sorting, grading and packing at the market. A number of farmers have started transportation after packing in cartons. A number of progressive farmer pack graded grape in plastic crates before sending to the market. A large number of traders and commission agents operate in the Nasik market 779 class A Traders and 194 class A Commission Agents

4.3.2 Significant parties outside the supply chain:

APEDA:In the context of export supply chains, the singularly responsible body for export regulation is APEDA. APEDA maintains strict regulatory procedures for export starting from farmer registration to residue monitoring in grapes.

MSAMB (Maharashtra State Agricultural Marketing Board): MSAMB supports grape growers in several ways. MSAMB at the state level implements the AEZ of APEDA and also provides export information to farmers. MSAMB also played a pivotal role in setting up MahaGrapes, co-operative in active promotion of Grape exports to EU. Presently, it has 27000 farmers allover Maharashtra under its aegis. It is one of the largest Growers ‘association of its kind in India.

Co-operatives:In order to facilitate grape exports from Maharashtra MahaGrapes was established toorganize the grape growers as producer cooperatives and has been greatly successful. Ten new cooperative societies are being established in Maharashtra for growing grapes and selling in MahaGrapes brand. The share of cooperative societies in the total grape exports is 30-35%.

All India Grape Growers Federation:This is an umbrella organization of state level grape grower organizations and currently5 state level organizations of Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu and Madhya Pradesh are members under this federation.

4.3.3 Market and Marketing of Grape

More than 80 percent of the total production is consumed as table grapes in India, and more than 70 percent of the total production is harvested in March-April, but the cold storage facilities are inadequate. Therefore, market

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gluts and fall of prices of grapes in March-April are common. Approximately, 2.5 percent (22,000 t) of fresh grapes are exported to the MiddleEast and European countries. The rest of the produce is marketed within the country.Grapes are exported through three different agencies viz. Grower Exporters, Growers’ Cooperatives and the Trader exporters. These agencies have established their own facilities for pre-cooling and cold storage in the vicinity of major production sites. Grapes are sent to keymarkets in the State such as Mumbai, Pune, Nagpur, Aurangabad and so on and outside the State markets in Kolkata, Chennai, Ahmadabad, and New Delhi and so on.

The produce is transported by road packed in corrugated boxes in regular trucks and tempos. The freight costs for transport to New Delhi is quoted at Rs 7000 per truck and to Mumbai market Rs 1800 to 2000 per truck load of 9 to 10 MT. Exports of fresh Grapes is carried out mainly by sea in refrigerated containers. There are more than hundred pre-cooling cum cold storage pack-houses in Nasik that facilitate exports. However, the facility is not enough, if increasing number of grape growers have to be convinced to invest in quality.

4.3.4 Price Fluctuations in GrapesA price of fresh Grape fluctuates due to a number of reasons. Prices go up due to lower production because of water shortage in production season and unusual rains during harvest time that adversely affect Grape production.With its highly developed export trade, the prices of grape in the local market are influenced by export performance. When exports are high the prices in the local markets are stable and remunerative for farmers.However due to high levels of competitiveness in the International Grape trade, the Indian Grape looses out in quality and fetches lower prices. This leads to less export during the season and more availability in local market with reduced price realization for the farmer. So there is need of Minimum Support Price in grape crop and farmers wants MSP should be in grape crop.

GRAPE PRICE (2010) Graph – 6

Source: Yes Bank Limited

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5. Grape Insurance

5.1 Draksha Vima Yojana

Draksha Vima was a unique composite crop insurance specially designed for the grape growers of Ozhar location in Nasik district of Maharashtra. This insurance scheme provided effective risk management support to grape growers likely to be impacted by adverse rainfall events, cold wave and hail incidence. The most important benefits of Draksha Vima are:

Trigger events like adverse rainfall and temperature can be independently verified admeasured. The parameters considered in designing this insurance product are relevant, appropriate and capture the rainfall and temperature induced risks affecting Grape production. It allows for speedy settlement of indemnities, as early as a fortnight after the completion of indemnity period.

Scope of Coverage

The policy compensates the insured, against the loss of investment resulting from unseasonal rainfall, cold wave and hailstorm (as the case may be) for different coverage options within a specific geographical location and specified time period, subject to a maximum of the Sum Insured specified in the policy under each of the coverage options.

The policy provides the following coverage options:

A) Flowering Rainfall Cover

“Flowering Rainfall” shall mean the rainfall received on any given day between the 35th to the 55th day (early pruning) / 71st day (middle pruning) / 66th day (late pruning) from the date of pruning. The dates of pruning have been categorized in three time slots of seven days each.

The three time slots pertaining to the day of pruning identified under this cover are:

i. 8th October to 14th October (early)ii. 15th October to 21st October (middle)iii. 22nd October to 28th October (late)

The “flowering periods” corresponding to the different time slots for pruning are:

Table – 5.1

Pruning Date between Flowering Period

8th October to 14th October 12th November to 8th December

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15th October to 21st October 19th November to 31st December

22nd October to 28th October 26th November to 2nd January

The indemnities corresponding to the above rainfall events would be:

Table – 5.2

EventIndemnity (as % of Sum Assured under this Cover)

Flowering rain between >5 mm to 15 mm on a day

5%

Flowering rain between >15 mm to 30 mm on a day

25%

Flowering rain between >30 mm to 75 mm on a day

60%

Flowering rain greater than >75 mm on a day 100%

The sum assured under the flowering rainfall cover is Rs. 50,000 per acre .This means that the maximum payout made under this cover in a particular year (policy period) cannot exceed Rs 50,000 per acre.

B) Berry-Cracking Rainfall Cover“Berry-Cracking Rainfall” shall mean the rainfall received on any given day between the 80th days from the date of pruning till 31st March.

The three time slots pertaining to the day of pruning identified under this cover are:

i. 8th October to 14th Octoberii. 15th October to 21st Octoberiii. 22nd October to 28th October

The “berry-cracking periods” corresponding to the different time slots for pruning are:

Table – 5.3

Pruning Date between Berry-Cracking Period

8th October to 14th October 27th December to 31st March

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15th October to 21st October 3rd January to 31st March

22nd October to 28th October 10th January to 31st March

The indemnities corresponding to the above rainfall events would be:

Table – 5.4

EventIndemnity (as % of Sum Assured under this Cover)

Flowering rain between >5 mm to 15 mm on a day

10%

Flowering rain between >15 mm to 30 mm on a day

30%

Flowering rain between >30 mm to 45 mm on a day

60%

Flowering rain greater than >45 mm on a day 100%

The maximum sum assured under the berry-cracking rainfall cover is Rs 30,000 per Acre. This means that the maximum payout made under this cover in a particular year cannot exceed Rs 30,000 per Acre.

C) Cold Wave Cover

“Cold Wave” shall mean the occurrence of temperature less than 3 degree centigrade for 2/3 consecutive days between the period 10th December to 15th February.

The events identified for coverage under this policy are:

a) Temperature less than 3°C for 2 consecutive daysb) Temperature less than 3°C for 3 consecutive days

The indemnities corresponding to the above cold wave events would be:

Table – 5.5

Event Indemnity

Temperature less than 3°C consecutively for 2 days

Rs. 10,000

Temperature less than 3°C consecutively Rs. 20,000

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for 3 days

The maximum sum assured under the cold wave cover is Rs 20,000 per Acre. This means that the maximum payout made under this cover in a particular year cannot exceed Rs 20,000 per Acre.

D) Hail Cover

“Hail” means a form of precipitation which consists of balls or irregular lumps of ice (hailstones). Hail being a peril that has not yet been parameterized, AIC would undertake loss/damage estimation exercises for individual fields or affected area to assess the claims payable due to hail.

Insurance cover commences 10 days after pruning or 7 days from purchase of insurance, whichever is later and continues till 30th April. The amount of loss assessable under this policy shall be a fixed sum as is provided under the maximum sum assured of Rs 30,000 per Acre, subject to the terms, conditions, and any other deductions stated below. This means that the maximum payout made under this cover in a particular year cannot exceed Rs 30,000 per Acre.

POLICY OPTIONS AND PRICING

Draksha Vima for Ozhar location was available in the form of three policy options (in terms of the perils covered), the details of which including indicative premium are as following:

Table – 5.6

Cover OptionFlowering

Berry Cracking

Cold Wave

Flowering + Berry Cracking

Flowering + Cold Wave

Berry Cracking + Cold Wave

All

Sum Insured (Rs.) 50000 30000

20000 80000 70000 50000

100000

Premium (Rs.)

Early Pruning

11849 2797 2975 13956 14203 503616310

Middle Pruning

9676 2329 2975 11315 11456 4568 13094

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Late Pruning

6239 2235 2975 7985 8593 447410138

KUNDEWADI

Table – 5.7

Cover OptionFlowering

Berry Cracking

Cold Wave

Flowering + Berry Cracking

Flowering + Cold Wave

Berry Cracking + Cold Wave

All

Sum Insured (Rs.) 50000 30000

20000 80000 70000 50000

100000

Premium (Rs.)

Early Pruning

10609 2570 4819 12662 14852 687116905

Middle Pruning

8309 2398 4819 10189 12552 669914433

Late Pruning

6728 2225 4819 8435 10971 652612679

5.1.1 Reason for failure of Draksha Vima Yojana:

Lack of Awareness : Majority of surveyed farmers were not aware about the Draksha Vima Yojana & even the Key functionaries of MahaGrapes, Research Centre for Grapes based at Nasik, Banks were not aware about the Scheme.

Inefficient Extension services : AIC was not able to disseminate accurately to the farmers about the insurance product that it was weather based scheme , not a crop insurance, for risk coverage like hail storm, unseasonal rainfall.

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High premium: Majority of farmers were ready to pay Rs.5000 as premium but in case of Draksha Vima Yojana the premium was comparatively higher than expected price band.

Inadequate compensation: the total compensation was only 1lakh in case of the scheme which was not at par with the output of 2.5-4lakh achieved from per acreage of the crop.

Lack of efficient marketing Channel for dissemination of the information regarding the scheme

Lack of efficient Govt. Machinery: there was shortfall in the proper implementation of the scheme from the government.No such Govt. mandate was disseminated to banks, horticulture and agriculture department at district level which lead to failure of the scheme.

5.2 Glance on the Weather Insurance Scheme of ICICI LOMBARD:

ICICI Lombard General Insurance, the leading private sector General Insurance Company, launched a unique Weather Insurance policy for Grape Cultivators in Nashik district, Maharashtra to cover deficit rainfall & variations in temperature. This policy had been scientifically designed on the basis of the crop pattern, historical temperature and rainfall data of Nashik District. Grape cultivators in Nashik can safeguard their crop from fluctuations in weather conditions like the intensity, spread of rainfall and temperature throughout the year. This weather insurance scheme ensured that the farmer is compensated on the basis of weather data provided by independent third party weather stations managed by IMD and such other agencies. On the basis of weather data collected from the weather stations ICICI Lombard disbursed claims directly within 30 days after the policy period is completed and thereby eliminating the need to file a claim or give any documentation or wait for a survey. The cover for the ICICI Lombard Weather Insurance for Grapes starts from May 20, 2005 to March 5, 2006 and takes care of the entire crop cycle encompassing the seeding, fruiting, berry formation and harvesting process for a period of 10 months .I CICI Lombard’s Weather Insurance for Grapes comes in three options. The first option, which covers the entire cycle till the process of harvesting; the second option which covers the six month period from May 2005 to November 2005 to safeguard from excessive rainfall leading to vigorous growth and reduced fruitfulness observed during June 1 –20, 2005, and new sprouting, leaf fall and early pruning during August 15, 2005 to September 30, 2005, as also the loss due to deficit rainfall during June to November 2005. The cover for the third option starts from October 14, 2005 – March 5, 2006 which takes care of fluctuations due to continuous rainfall which leads to diseases, flower drop and more settling and excessive rainfall which leads to berry cracking and post harvest rotting. The high temperature that could be observed during January to March could lead to sunburn and the

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difference between the maximum and minimum temperature which could lead to berry cracking is covered under this unique insurance scheme for Grapes cultivation in Nashik. The weather data would be regularly collected by ICICI Lombard during the policy period and submitted to a professional weather data- cleaning & enhancing agency for verification.

5.2.1 Reasons for Failure : (i) The amount of premium to be given by the grape grower was much

higher than expected. (ii) The process of the insurance was quite complex. (iii) ICICI couldn’t convince the Draksha Sangh regarding the loss assessment mechanism so the scheme couldn’t fetch the expected results.

6. Farmer’s views

6.1 Findings

The survey was conducted on 100 farmers as sample size at randomly in Nashik, Niphad, and Dindori Talukas. The villages covered under these talukas are Ojhar, Pimpri, Pipalgaon, Adgaon, Ungaon, Sakora, Malegaon, Sinnar, Ninsur, Sanghvi, Venchur, Chanvaad, Laasangaon, Naitala, Naasalgaon etc.

Premium: the farmer are ready to buy insurance product for grape at premium Rs.1000 to 10,000 which varies from farmer to farmer and there were key observation about the premium, the farmers who has large size land holding want to give less premium as compare to small and marginal farmers.

Graph - 7

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Source: Yes Bank Limited

Sum Insured: 70% of the farmers want to insure entire crop which means that sum insure would be varies from Rs.2.5 lakh to Rs. 4.5 lakh. Rest of the farmers only want insurance against cost if cultivation i.e. Rs.70,000/- thousand to Rs 100,000/-

Major risk in Grapes: The survey found that the major risk for the crop are hail storm, unseasonal rainfall which are partially uncontrollable and Powdery mildew, Downy mildew, Mealy bug and Thrips which can only be controlled by chemicals.

Graph - 8

Source: Yes Bank Limited

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Lack of awareness: 95% of the farmers were not aware about the Draksha Vima Yojana. Rests of the farmers were aware about the scheme through newspaper, television, radio etc but they were not aware how to approach or where to approach to understand the scheme.

Need of insurance: 100% of farmers are ready for insurance of grape and they had showed very good response for grape insurance. However they prefer to have meetings and inputs from the field officer before accepting the scheme.

6.2 Farmer’s opinion

Combined insurance product: the insurance should cover all risk coverage for grape crop such as downy mildew, powdery mildew, mealy bug, hail storm, and unseasonal rainfall.

Weather Station: Farmers want that the weather stations should be at every 10 Km radius so that they can get accurate information regarding rainfall, temperature, cloudy weather, and sunshine hours etc.

Less documentation work: The documentary work should be less to buy insurance scheme and claim settlement

Quick Settlement: The claim settlement should be quick like in case of life insurance.

Toll free number: There should be one toll free number so that we can call insurance company regarding problems pertaining in vineyard like unseasonal rainfall, hailstorm

Minimum Support Price: To assure price of grape there should be MSP because price fluctuation at the time of harvesting varies from Rs.12-35 /kg.

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Government and Institutional ‘view

The key players involved in the institutional machinery of the District are: District Agriculture Deptt. Directorate of NHB NRC, Pune SAUs Banks

Draksha Bagitdar Sangh & other specialized organizations engaged in providing end to end solutions to the Grape growers. The institutional organizations ensure the effective implementations of the schemes which are brought in State & district from the centre.These are responsible for carrying out the required extension activities for dissemination of latest information to the farmers regarding new policies & the innovative agricultural practices being introduced in the field level.

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Testing LabsDepartment Of AgricultureNRC GrapesFarmersDraksha Bagitdar Sangh

Pre cooling andCold storage unitsCold storage

7.1Findings and Opinion:

Awareness: 60% of all stakeholders include representatives of Banks, National Horticulture board, Horticulture and Agriculture department at district level, Grape research centre were not aware about the grape insurance scheme.

Crop loan: 95-100% of total farmers has crop loan from bank or PACS which indicates crop might be loss in last year due to unseasonal rainfall, hail storm, downy mildew etc.

Time of planting: According to Grape Research Centre the farmers are growing early crop instead of normal season crop which leads to crop loss due to rainfall at the time fruit setting and cause downy mildew to crop.

Grape Insurance Scheme: According to grape research centre based at Nasik, the Insurance scheme should be decided on the basis of scientific farming practices means whoever are not following scientific farming practices they should not include in insurance policy.

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Technology Up gradationAgricultural UniversitiesGrape Grower AssociationNRC GrapesProgressive farmersGrape Research

FinanceBanks1 Commercial Banks2 Co -Operative Bank3 Private BanksSubsidiesNHB/APEDA

NASIK GRAPE CLUSTER

MarketingAPMCMahaGrapesMarketing BoardCommission Agents/Traders

Technical inputsNRC GrapesAgri. UniversitiesMarketing BoardGrape Growers AssociationPrivate Companies

Maintenance/RepairsAgro Service CentersTractor/M/c WorkshopService Centre for

Technical TrainingNRC GrapesMaha grapesGrape GrowersAssociationAgri. Universities

Premium aspect: the premium should be collected at the time of loan disbursement from farmers and grape insurance should be compulsory for all grape growers.

Cost of cultivation should be cover: Because of heavy investment in the crop so there is need of insurance which can cover at least the cost of cultivation.

Additional work for government employee: to deal with insurance product for grape it is additional work of government employee so the scheme should be run through insurance company for its effective implementation.

Communication gap: the 95% of total farmers are not aware about the Draksha Vima Yojana which indicates there is need of proper communication means to reach at ground level of scheme.

8. Recommendation and Conclusion:

8.1 GRAPE INSURANCE BUSINESS MODEL:

Claim Claim Claim

Loan Premium

Loan Premium

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AIC Nodal Bank

Bank Branch

.RRB

.Commercial banks

.DCCB

PACS

(Primary Agricultural Co-operative Society)

Farmer

AIC representatives at block level

Weather station

Claim Claim

Weather information

Product

information About insurance

8.2 Recommendations towards a Business Strategy for Future Grape Insurance Product:

1. Premium Rate: Main acceptability of a scheme depends on its premium rate, which as per survey is on the higher side. While the wish list of the farmers is that the premium rate should be between Rs.4000-5000, suggestion is that, the farmer should be educated about the coverage that could be provided for this premium.

Also, some innovative ideas, like EMI schemes on the premiums—which can be paid on a yearly basis can be worked out to make it easier for the farmers to pay up.

2. Policy should be of long term (minimum for 5 years): as some time there is continuous loss to crop for two to three years which leads to loss to the company in huge amount so to recover the cost and for getting profit out of this policy there is need of long term policy.

3. Farmers to be taken into Confidence before launching the product: As farmers are aware about the risky nature of grape crop they will definitely come forward for insurance but there is need of convincing and educating the farmers about the scheme so that they can get confidence about the policy.

4. Compulsory basis. The scheme must be mandatory to all grape growers as grape is highly risky and more capital intensive crop.

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5. Separate Network Channel: the farmers who are aware about the scheme they don’t know where to approach for the grape insurance product so there should be one field officer from the Insurance Company for 10-12 villages who could sensitize the farmers and be available for any queries.

6. Weather station: as the scheme is weather based insurance so there is need a good network of weather station at every 10 km radius so that farmers can get information regarding rainfall, temperature, sunshine hour etc. But as the cost of such weather station is quite high, it is necessary that we start shifting towards satellite based weather predictions.

7. Effective Marketing: Cost bearing by a farmer increases only if he gets good price for his produce. While wine grapes are procured by the wineries, recently the table grapes of the region have also found a better outlet through Nasik Terminal Market. Creation of good marketing facilities and helping to grow export quality grapes will also indirectly encourage the farmers to take more insurance cover for the product.

8. Involvement of private players: The role private players are playing in every other sector needs to be appreciated. So, the involvement of a private entity in form of PPP is a good proposition. They would bring with them required investment for infrastructure such as establishment of weather stations & other required infrastructure & expertise in establishment of knowledge kiosks for fetching information regarding innovative technologies & agriculture practices with regular monitoring from the Government.

The suggested model including private players:

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Weather Station (IMD)

Private EntityGovernmen

t

Draksh

Bagit dar

KVK’s (Technical Assistant)

Monitoring

Claim

Insurance

Agriculture Insurance Co.

(NODAL AGENCY) Soft Fund

Farmer

Premium

In the PPP Model the private entity plays the role of premium collector & claim addressor who will disburse the claims. In this AIC (Agriculture Insurance Company) will play the role of the facilitator rather monitoring the activities of the Private Entity&ensuring that the claim addressal is transparent & the farmer is not being exploited by the Private co. AIC will provide soft loans to the Private player to ensure optimum premium being charged from the farmers.The loss assessment team would have Agriculture experts from respective KVK’s, members from Draksha Sangh, official from AIC & officials from the company itself.The company would organize monthly meetings in coordination with Draksha officials & KVK experts for the farmers regarding the precautionary measures for preventing disease occurrences. Also ,there will be weather updates from the IMD (Indian Meteorological Deptt.) to the farmers through pilot information centres established by the private entity.

Further, the company officials would visit the vineyards during the fruiting season.This all ensures:

Efficiency Transparency Quick claim Redressal Acceptance by the farmers due to presence of Draksha Members in the

team.

9. Involvement of Panchayat level officials

10. The loss assessment & claim redressal should be done by an expert team of stakeholders to ensure transparency.

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