वृक्ष बीमा: भारत में एक नई पहल

Agriculture production and farm incomes in India are frequently affected by natural disasters such as droughts, floods, cyclones, storms, landslides and earthquakes.

Susceptibility of agriculture to these disasters is compounded by the outbreak of epidemics and man made disasters such as fire, sale of spurious seeds, fertilizers and pesticides, price crashes etc.

To overcome these uncontrollable factors, agriculture insurance came to life. Agricultural Insurance is a means of protecting the  agriculturist against financial losses due to uncertainties that may arise agricultural losses  arising from named or all unforeseen risks beyond their control (AIC, 2008).

In this ever changing era of climate change, everything has become uncertain. To fight/adapt to these climate related vagaries, scientists are advocating to adopt climate smart agricultural (CSA) practices. One of the best CSA practice considered is agroforestry, a sustainable land use system wherein farmers grow agricultural crops along with certain tree species either simultaneously or in some spatial pattern.

Agroforestry plays a vital role in the Indian economy by way of tangible and intangible benefits.At present agroforestry meets almost half of the demand of fuel wood,two thirds of the small timber, 70–80%wood for plywood, 60% of raw material for paper pulp and 9–11% of the green fodder requirement of livestock, besides meeting the subsistence needs of house holds for food, fruit, fibre, medicine,etc. (NRCAF vision, 2050).

Farmers and industries have taken up wide scale plantations of poplar,Eucalyptus, bamboo, Melia , Acacia, Casuarina,Ailanthus and teak for commercial agroforestry due to their great market potential and climate resilience.

But these CSA practices are also vulnerable to natural disasters. One such instance is in 2011, when Thane cyclone devastated vast area of Casuarina plantations in Villupuram and Cuddalore districts of Tamil Nadu. The wood recovered from the wind thrown plantations was estimated at over 7 lakh tonnes, causing severe economic loss to the farmers.

The agriculture sector has the facilities of crop insurance and credits, whereas agroforestry was left behind. The National Agroforestry Policy, 2014 has also given recommendations for the need of tree insurance and tree credits to encourage farmers in expanding the area under agroforestry and to protect them from various climate related disasters.

The good news is that, the recommendations has already been implemented and for the first time in the country “Agroforestry Plantation Insurance” was launched by United Insurance Company in Tamil Nadu. This scheme is expected to open a new chapter in sustainability of tree husbandry in India.

Tree insurance

Tree insurance is one method by which farmers can stabilize farm income and investment and guard against disastrous effect of losses due to natural hazards or low market prices. It cushions the shock of crop losses by providing farmers with a minimum amount of protection.

There are two major categories of agricultural insurance: single and multi-peril coverage. Single peril coverage offers protection from single hazard while multiple peril provides protection from several hazards.

In India, multi-peril tree insurance programme is being implemented, considering the overwhelming impact of nature on agricultural output and its disastrous consequences on the society.

Farmers generally suffer huge losses due to factors ranging from floods, cyclones, fire etc, which destroys their years of hard work. This insurance scheme can act as a safety net for these farmers.

This scheme covers pulpwood trees such as Casuarina, Eucalyptus, Meliadubia, Ardu (Ailanthus), Gamhar (Gmelina)  (Subabul) Leucaena and Shisham (Dalbergia sissoo).These species are selected on the basis of their wide scale cultivation and varied use in different wood based industries.

The other species included are biofuel plant/ tree like Jatropha, Karanja,Neem, Mahua, Callophyllum&Simarouba and horticultural crops like Arecanut, Cocoa and Rubber.

At present, three insurance companies namely United India Insurance, Agriculture insurance company of India and oriental insurance company are providing the facility of tree insurance. The risks covered, premium amount and sum assured varies with different companies (Table 1).

Table 1: Different Tree Insurance policies in India

Trees covered  Premium Sum assured Policy Name Insurance Company Period of insurance
Casuarina, Eucalyptus, Meliadubia Ailanthus, Gmelina, Leucaena and Dalbergia sissoo 1.25 per cent of the input cost Input cost Agroforestry Plantation Insurance United India Insurance, Chennai,  Annual
Eucalytptus, Poplar, Subabul and Casuarina Depends on species, risks, geographical location etc Equivalent to input cost and extended upto 125- 150% of input cost Pulpwood Tree Insurance Agriculture insurance company of India Annual
Jatropha, Karanja,Neem, Mahua, Callophyllum&Simarouba  Depends on species, risks, geographical location etc Equivalent to input cost and extended upto 125- 150% of input cost Bio-Fuel Tree /Plant Insurance  Agriculture insurance company of India Annual
Rubber, Eucalyptus, Poplar, Teak, Arecanut, Cocoa,citrus, chickoo, pomegranate 1.25% of Sum Insured Sum Insured shall be based on the cost of cultivation Plantation / Horticulture Insurance The Oriental Insurance Company Limited  Annual
Rubber Depends on input cost and stage of crop Based on input cost and yield deduction Rubber plantation insurance Agriculture insurance company of India Immature:  7 yearsMature :8 to 25 years

The average premium rate for basic plan would be 1.25 per cent of the input cost. As per the policy, the premium to be paid for one acre plantation would range between Rs. 300 and Rs. 600 depending on the input cost of the respective tree species.

It would cover forest and bush fire, lightening, riot and strike, storm and cyclone, flood and inundation and loss due to wild animal attack. In the event of damage due to any of the above mentioned perils, the farmer would be settled with the input cost of respective trees.

Sum Insured shall be based on the cost of cultivation i.e. input cost or cost of raising/development of insured tree(s) – whichever items is applicable depending on the crop which is insured.

Suggestions/ Scope for improvement

  1. At present, in this scheme farmer will have to pay an annual premium, which can made into one-time payment
  2. Requesting the government and industries to bear the insurance cost so that farmers will not have to pay the premium
  3. The insurance scheme must be extended to other tree species and to all other states in the country
  4. Rather than individual trees, whole agroforestry system has to be insured.
  5. More insurance companies and agencies should come forward to support tree insurance/agroforestry insurance


Tree insurance is a good beginning to encourage climate smart and resilient technology. This scheme is expected to facilitate increase in area covered under agroforestry and assure steady supply of quality raw materials to the industry. 

Carbon sequestration and protection of reserve forests of India will be by-products of the initiative.The most vulnerable community for climate related risks are our farmers, tree insurance will act as a safety net to protect and prosper our farming community. 


Agriculture Insurance Company of India Ltd(2008): www.aicofindia.org accessed 2006 to 2008.

NRCAF, Vision 2050. National ResearchCentre for Agroforestry, Jhansi, 2013, p.30.


Uthappa A. R, S. B Chavan and A.K. Handa

ICAR- Central Agroforestry Research Institute, Jhansi

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