Why crop insurance has failed Kashmir’s fruit economy

These climate shocks are beginning to unravel Kashmir’s ₹15,000-crore fruit economy, trapping apple growers in a cycle of rising input costs and recurring losses, even as the promise of crop insurance remains largely theoretical.

Weighed down by low enthusiasm after another season of heavy losses, fruit growers have begun the new farming cycle, pruning apple trees in their orchards, amid Chilai Kalan, Kashmir's harshest forty days of winter.

In Allaiepora village of Pulwama, Khursheed Ahmad Allaie tells Mint that the apple growers who once invested heavily in establishing high-density orchards, converting paddy fields into apple farms, now find themselves at a loss, as the impacts of the climate crisis have intensified over the past decade.

“Global warming has changed everything. Heatwaves bring disease. Hailstorms destroy crop quality. Apples that should be A-grade become C-grade, bringing only losses to growers," says the 34-year-old while pointing to the scars on his trees, in his 15-kanal orchard, left by last August’s extreme weather.

“The gamble that once promised higher yields and faster returns has increasingly become a source of anxiety and debt," he says, seated near a heap of apples—decayed brown, soft, slick with rot, adding that without crop insurance, growers like him have little option but to watch their produce spoil, absorbing the losses in silence.

Further south, in Katrasoo in Kulgam, Mohammad Yousuf Bhat sets out on the narrow path to his 12-kanal orchard. His steps crunch on frozen soil as he passes rows of high-density plantations and decades-old traditional trees, their bare branches trembling in the cold wind. “Crop insurance is our security. Without it, apple farming is just a gamble."

Bhat’s family has tended these orchards for nearly 80 years. Each season, he weighs the risks—hailstorms in June and July, sudden heatwaves, snowless winters against the rising costs of pesticides, labour and irrigation. This year, a hailstorm wiped out nearly half the crop. In 2020 and 2021, early snowfall snapped decades-old, fruit-laden trees. “The relief we received was ₹1,000," says the 48-year-old. “It barely covered anything."

Horticulture underpins the Union territory's economy more than any other sector. Government estimates place its annual turnover at about ₹15,000 crore, with more than 3.5 million people deriving direct or indirect employment from it, making orchards the region’s most dependable source of livelihoods.

Data hurdle

Allaie’s crop, like many others, remains in the hands of traders who claim their own losses. “Fertiliser bills and pesticide payments are pending, and school fees for my children are overdue. If there had been insurance, we could have waited. Even if the crop spoiled, compensation would have helped us survive," he says.

Mohammad Ashraf Wani, president of the mega fruit mandi in Shopian, often described as Kashmir’s apple bowl, says crop insurance has become essential to the industry’s survival. “Climate change is hitting both quality and quantity," he says. “We now see snowless winters when snow is crucial, heatwaves when rainfall is needed, heavy rain during flowering, scab outbreaks in peak summer and cloudbursts that wash away roads and disrupt transport."

Wani, a seasoned apple grower, points to declining chilling hours as a key indicator of stress. “Apple trees need around 1,600 chilling hours. Earlier, areas like Shopian recorded nearly 4,000. Today, it has dropped to around 320. Once temperatures cross 28 degrees Celsius, apple cultivation becomes unviable."

Yet even as climatic risk intensifies, crop insurance in Kashmir has remained uneven and exclusionary. For instance, the Pradhan Mantri Fasal Bima Yojana (PMFBY), launched nationally in 2016, now covers all 20 districts of the Union territory. Enrolment has risen, premiums have been collected, and claims settled.

Since its rollout, about 960,000 farmers in Jammu and Kashmir have been insured, covering roughly 560,000 hectares. Claims worth ₹156 crore have been paid out, with farmers receiving nearly ₹68 crore. However, most of this coverage has bypassed horticulture, particularly apple cultivation.

Between 2017 and 2025, insurance payouts largely went to wheat, paddy, and oilseeds grown predominantly in the Jammu region. In the Kashmir Valley, where paddy fields are steadily being converted into apple orchards, insurance penetration remains limited. Only about 16% of cropped land is insured, well below the government’s stated target of 25%.

“The scheme does not effectively cover horticulture," says Bashir Ahmad Basheer, chairman of the Kashmir Valley Fruit Growers-cum-Dealers Union. “Our economy depends on fruit, not food grains. But the PMFBY is still largely designed around agricultural crops."

Basheer tells Mint that assurances were made years ago that horticulture insurance would be implemented, but little has changed on the ground. “Most orchardists are small growers with limited land holdings. Losses pile up every year due to weather events, and there is still no safety net."

Insurance companies, for their part, have remained wary of apples. Altaf Aijaz Andrabi, former director of agriculture and the first mission director of crop insurance in J&K, says the reluctance stems from weak data and flawed design. “Insurance companies do not understand apple-yield estimation," he says. “There is no standardized, notified yield assessment model backed by long-term weather data. That makes insurers hesitant."

Climate change has compounded this uncertainty. “Apples have become a highly fluctuating, high-risk crop," Andrabi adds. “Insurers look for viability. Apples no longer offer predictability."

Javid Ahmad Dar, J&K’s minister for agriculture production, acknowledges the problem. “There are very few bidders," he tells Mint. “Insurance companies operate for profit, and repeated weather events have made them cautious."

According to Dar, the government is revisiting the scheme to make it more attractive to insurers while ensuring benefits for growers.

For years, the Valley remained outside meaningful crop insurance coverage because companies quoted prohibitively high premiums, citing the risks of operating in Kashmir. Tenders were floated repeatedly, only to be scrapped when bids exceeded what the government was willing to accept. In the absence of insurance, growers absorbed losses from frequent weather shocks without institutional support.

Haseeb Drabu, economist and former finance minister of the erstwhile state, argues that the absence of long-term data lies at the heart of the failure. “You cannot design insurance without data. You need at least a hundred years of weather and yield patterns to assess risk," he tells Mint.

Drabu also points to the orchard structure. “Traditional orchards have highly variable yields. High-density, standardized plantations are easier to insure because output is more predictable. Uniformity reduces risk." Policy design, he says, must be driven by research institutions and grounded in data.

The administrative bottlenecks have been equally damaging. Suhail Inamullah, technical officer to the director of agriculture, Kashmir, explains that earlier operational guidelines required insurers to bid for entire crop-cluster combinations. “If a cluster had five crops, a company had to quote for all five. If even one crop was left out, the bid was null and void. Apples posed a particular problem because there was no ratified crop-cutting or yield-assessment module. As a result, bids kept failing."

In 2019, the J&K government took up the issue with the Centre, leading to the rollout of the Restructured Weather-Based Crop Insurance Scheme (RWBCIS) for horticulture. Since then, Inamullah says, insurer interest has picked up slowly.

Financial barrier

Still, affordability remains a major obstacle. Andrabi argues that insurance will not work without higher subsidies. “A farmer's contribution of 1% is manageable. Even 5% is too high at current rates," he says. If premiums could be brought down to around ₹8,000 per hectare, growers might enrol. Anything higher, he says, is unaffordable.

At present, premiums are capped at 25%, with the Centre bearing about 11%, the Union territory government 9% and growers 5%. Despite this, no company has come forward to insure apples. While other crops have found takers, apples remain excluded.

“How can growers pay high premiums when they don’t even recover input costs?" Basheer asks. Fertilizers, sprays, labour and packaging costs have risen sharply, even as returns fluctuate.

There are signs of movement. For example, in 2025, the government invited fresh bids for horticulture insurance. Four companies bid for the Kashmir division and five for Jammu. The bid evaluation committee has submitted its recommendations. Inamullah says this level of interest is unprecedented. “We are hopeful the scheme will finally take off."

Vikas Anand, director of horticulture, Kashmir, says the agriculture department is the nodal agency for implementing crop insurance in J&K, and the scheme is designed to address climate-induced losses. “The restructured weather-based insurance covers losses caused by hailstorms, uneven temperature patterns and excessive rainfall."