Exposed At Sea, Fishers Need Better Insurance To Manage Climate Risks

Possa, like others of the fishing community, is still to recover from the losses caused by the pandemic. But their problem is further aggravated by the frequent and intense cyclones and torrential rains that have been battering India's coastline over the last few years. When Possa and his 12-member crew now launch their boats, they are not sure they will return home safely. A few days ago, one of his friends lost a member of his crew at sea. The body was later found floating at a harbour in Palghar district, around 80 km north of Uttan.

Rufino Possa, 50, came back from the sea after 12 days. "Each trip costs us more than Rs 1 lakh, we cannot afford to come back without any catch," he said. Right: A crew member on Possa's boat is carrying a big fish they caught in. Photo credit: Flavia Lopes

"I have been in the fishing business for the last 30 years but have never faced so much loss and damage at sea as I have in the last few years," said Possa. Unexpected summer rains this year also damaged Rs 2-lakh worth of fish he had put out to dry.

Leo Colaco runs a fishing co-operative society in Uttan, the Uttan Machimar Vikas Society Ltd. Its 115 members now frequently seek help with insurance claims, loans and subsidies, he said. "The fishing business has become even more precarious after these frequent weather events like cyclones and heavy rains," said Colaco.

India's 8,000-km coastline is a source of livelihood for almost 28 million workers in the fishing sector, including those vendors, boat owners and operators, 'ice breakers' who ensure that the catch is kept iced, drivers and owners of vehicles used to transport the catch and so on. Among them, close to 67% live below the poverty line, according to the 2016 National Marine Fisheries Census conducted by the government-run Central Marine Fisheries Research Institute (CMFRI).

Unusual extreme weather events are being witnessed along India's coast. For example, in May 2021, a severe cyclonic storm Tauktae landed on India's west coast though cyclonic storms are rarely formed in the Arabian Sea and this can be traced to the warming of oceans, we reported in May 2021.

Coastal climate disasters can impact the livelihood of fishers in multiple ways--they not only cause death and injuries at sea but also loss of or damage to expensive fishing gear, large-scale decline in the haul, and damage to assets such as aquaculture farms, marine cages used in aquaculture, storage infrastructure and so on.

These losses are not covered under conventional insurance schemes. Currently, fishers have access to insurance against accidents, death and certain other kinds of losses. The Centre offers group accident insurance that provides coverage against accident or death at sea to entire fishing crews. Insurance is also available for total destruction or loss of fishing vessels from public insurance companies such as the New India Assurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company Ltd. Some private insurers also compensate for loss of fishing gear at an extra premium.

"There is an increasing loss of workdays, loss and damage of vessels, property, and mortality on account of adverse climatic conditions. This is not matched by the current levels of risk-coverage provided under these schemes," said Adithya Pillai of Dakshin Foundation, a Bengaluru-based research organisation working on marine conservation and environment sustainability.

Need for measures to deal with climate shocks

The agriculture ministry did introduce a weather-based index insurance scheme in 2003 but only to benefit farmers. In 2016, the Pradhan Mantri Fasal Bima Yojana or the PM's crop insurance scheme began to cover crop losses caused by adverse weather, replacing the weather index insurance. However, there is no equivalent scheme for the fisheries sector.

What can be done to help livelihoods impacted by disasters precipitated by climate change? In a February 2021 report, the Food and Agriculture Organization of the United Nations asked national governments to come up with social security measures to help fishers recover from the Covid-19 pandemic and the exacerbated climatic events.

"Income-support programmes and better social support systems help absorb systemic shocks like natural disasters, or Covid, that increase overall vulnerability and negative coping strategies," said Pillai of Dakshin Foundation. "Insurance schemes need to be suited to the level of occupational risks, uncertainties and ability of fishers to provide collateral and pay premiums."

Several western countries have designed a weather index insurance to cover climate risks such as excess rainfall or droughts that impact specific populations. In 2007, 23 countries in central America and the Caribbean formed a Caribbean Catastrophe Risk Insurance Facility, a multi-country insurance instrument to cover the financial impact of natural hazards like tropical cyclones, earthquakes and excess rainfall. The instrument also has a specific fisheries policy, the Caribbean Ocean and Aquaculture Sustainability Facility (COAST) that insures fishing vessels, fishing equipment and fishing infrastructure against extreme weather events.

Climate risk insurance is being promoted by organisations to support vulnerable communities and compensate them for unavoidable risks such as extreme weather events.

Partial protection against climate vagaries

Apart from one-time compensations provided under disaster relief funds, which we detail later, fishers also have access to accident insurance schemes provided by the Centre and state governments such as the Group Accident Insurance Scheme for Fishermen under the Pradhan Mantri Suraksha Bima Yojana. In 2020, the central government came up with another insurance scheme under the Pradhan Mantri Matsya Sampada Yojana (PMMSY) that gives greater coverage between Rs 25,000 and Rs 5 lakh for accidental injuries or deaths of fishers.

However, such state and central schemes do not cover loss and damage caused by extreme weather events, said Shinoj P., a senior scientist at CMFRI. And, apart from accident risks, other big risks in the sector such as loss and damage to fishing vessels, gear and assets of fishers are only partially covered by private entities, he said.

As we said earlier, India's coastline has been hit by successive disasters in recent years. In 2020, four cyclones hit different coastal parts of India: Amphan hit the east in May, Nisarga landed in Maharashtra in June, Nivar swept coastal south-east in November and Burevi impacted Tamil Nadu and Kerala in early December. The frequency of cyclones in all oceans surrounding India has increased: both 2018 and 2019 recorded seven cyclones, higher than the annual long-period average (1961-2017) of 4.5, we reported in December 2020.

Lynel Mallankar with his catch, seen here at Uttan on October 2. Photo credit: Flavia Lopes

Lynel Mallekar, 40, a fisher from Uttan, has had to deal with the impact of several such weather events. He had bought a new boat in 2019 but it has already undergone six or seven major repairs costing a total of Rs 4 lakh. The boat itself cost him Rs 20 lakh.

Though the vessel is insured, Mallekar could not recover the cost of repairs. "Vessel insurances in India cover only total loss, which means that only if your boat disappears can you claim Rs 1-2 lakh for a Rs 10-50 lakh loss," said Colaco, head of the fisher collective in Uttan, who has appointed an insurance clerk for the cooperative.

Delayed payment

Apart from vessel insurance offered by public insurance companies, accident/death insurance schemes for fishers are largely covered under state and central insurance programmes. The centre's Group Accidental Insurance Scheme for Active Fishermen covers life/disability risks of a fishing crew. Under this, the insured can seek Rs 2 lakh in case of permanent disability/accidental death, and Rs 1 lakh in case of partial disability.

Investigations into incidents to claim insurance are also time consuming, said Colaco. "Fishers rarely have time to pursue them," he said. Royden Dhokalkar, who lost his crew member in an accident at sea in January 2020, was sanctioned his claim of Rs 1 lakh a year and a half later, in June 2021. Local co-operative societies, like those run by Leo Colaco, have been instrumental in pushing for insurance claims.

But loss of life and damage to vessels is not the only risk fishers have to bear, said Narendra Patil, president of the National Fishworkers Forum, a union of small and traditional fishworkers. "Equipment like large hooks, lines, traps and fishing nets are expensive and every fisher invests around Rs 1 lakh in a trip. When storms hit or there is no catch, they return home with no income in hand and there is no support available for that," he said.

'One-time disaster relief not enough'

The Arabian Sea, as we said, no longer enjoys a relatively stable climate due to global warming. The three cyclones to impact it in 2020-21--Amphan, Yaas and Taukate--damaged over 14,000 boats and 78,000 fishing nets, as per the Inter-Ministerial Central Teams constituted by the government. "But such damage is rarely accounted for in insurance claims," said activist Patil.

Boats damaged during cyclone Taukate, seen here in Uttan on October 2. Photo credit: Flavia Lopes

Disaster relief programmes do offer financial assistance to those whose livelihoods have been hit but these are not in the nature of insurance. "There are one-time compensation schemes specific to disaster management and mitigation, like relief and rehabilitation of coastal communities affected by floods and cyclones but there aren't insurance schemes that talk explicitly about climate risk and resilience in the fisheries sector," said Pillai of Dakshin Foundation. "Additionally there are some private schemes that help cover damage to fishing vessels and gears, but these insurance schemes still have low levels of coverage."

In Andhra Pradesh, each of the 109,231 registered fishers in the state benefited from a financial assistance of Rs 10,000. In April 2020, Andhra Pradesh also announced a one-time payment of Rs 2,000 benefitting 6,000 migrant fish workers working in Gujarat. That same month, in Tamil Nadu, a one-time financial aid of Rs 1,000 was given to 485,000 fishers and fish vendors who were members of the State Fishermen Welfare Board. In June and July 2020, Kerala government distributed a one-time Covid relief payment of Rs 2,000 to every fisher. Every worker in allied fields was paid Rs 1,000.

One-time payments cannot sustain the community for long, said activist Patil. The National Fishworkers Forum had asked the central government to announce a monthly package which includes Rs 50,000 per month for boat owners, Rs 15,000 per month for the crew and Rs 10,000 per month for those involved in selling fish. It has also sought interest-free loans of up to Rs 5 lakh from national banks ahead of the new fishing season.

We sought comments from the Department of Fisheries under the Ministry of Fisheries, Animal Husbandry and Dairying on October 5 on why no climate risk insurance is being provided to fishers. We will update the article when we receive a response.

Push for sustainable fishing

M.A. Sekar, who belongs to the fishing community of Tamil Nadu, and worked in the supply chain at the Marine Products Export Development Authority under the Ministry of Commerce and Industry, has been charting the changes in the sector. "Lately, European countries who import fish have been pressuring India for sustainable fishing. So, schemes like PMMSY are introduced to push sustainable fishing. But how can you promote sustainable fishing, without addressing the livelihood, labour conditions and labour rights of the fishing community?" he asked. "Unlike farmers who are supported through minimum support price, in the fisheries sector, the fishworkers are vulnerable to the [market] forces [and the influence] of corporates and middlemen."

In September 2020, the central Ministry of Fisheries, Animal Husbandry and Dairying came up with a group accident insurance under the PPMMSY, a Rs-20,050 crore scheme including accident insurance for fishers. But fisher welfare is allotted only 8% of the funds compared to what aquaculture and related infrastructure get.

By September 2021, only 1,585,149 fishers from seven states--Telangana, Odisha, Tripura, Himachal Pradesh, Punjab, Rajasthan and Sikkim--have been covered under the scheme with their state government paying their share of premiums. But large fish producing states like Andhra Pradesh, West Bengal, Gujarat, Maharashtra, Kerala have not yet paid their share of premiums, leaving the scheme in limbo.

"States like Maharashtra have not alloted adequate budget to the fisheries sector to be able to pay their due share of premiums," said Colaco of the Uttan fishers collective. We contacted the regional director of Maharashtra State Fisheries Department for a response to Colaco's statement.

"The earlier group accident insurance scheme has been active in the state. The premium is divided equally between the Centre, state and beneficiary, but the benefits could not be given to the beneficiaries because they did not apply for the scheme," said Devare, regional director of Maharashtra state fisheries department.

Burdened by debt, loss of livelihood

Fisher Vijay Burkhav bought a new boat in 2020 for Rs 50 lakh. "The new boat is made of fiberglass, unlike the earlier one, which was made of teak wood and used to get damaged in high currents," he said. But banks would not give him a loan to buy the vessel because he could not show a stable income. Burkhav ended up taking a loan from a private money lender which he says will take him at least 10 years to repay.

Fisherfolk normally take loans of upto Rs 1-2 lakh for purchases and repairs on the basis of their earnings from the previous fishing season, but with earnings dipping due to unpredictable weather changes, they cannot plan ahead for their businesses, said Colaco.

To respond to the economic consequences of the pandemic, a number of states set up compensation measures for workers in the fishing sector. Civil society organisations had protested after the Pradhan Mantri Kisan Samman Nidhi relief programme under the Union Ministry of Agriculture and Farmers Welfare initially excluded fishers.

The fisher community has been dependent on informal players in the credit market--auctioneer-middlemen, third-party 'shareholders' (those who invest in the fishing business on an informal basis) and private money lenders, according to a 2019 study by CMFRI. These informal contracts end up becoming debt traps, the study said.

"Fishers are resource-poor, they cannot afford premiums. How will they pay off huge loans?" said Shinoj of CMFRI.

Need for innovative schemes

"The compensation given under disaster management rules is very nominal. For loss of Rs 5 lakh or Rs 10 lakh, the compensation is a meagre Rs 15,000-Rs 20,000," said Kiran Koli, secretary of the Maharashtra Machhimar Kruti Samiti, a fisher's collective based in the Konkan region of Maharashtra.

Existing insurance schemes are not innovative enough to deal with the climate crisis, said Shinoj of CFMRI.

Activist Koli said he met Maharashtra's industry minister Subash Desai and the relief and rehabilitation minister Vijay Wadettiwar on the need to insure fishers under innovative schemes such as the crop insurance scheme that covers loss and damage arising out of unforeseen circumstances. "They agreed but there is no action yet," he said.

In the aftermath of the 2004 tsunami in Chennai, Bajaj Allianz General Insurance with the assistance of CARE India, a not-for-profit organisation working on health, education and women empowerment, developed Disaster Risk Insurance Product for Coastal Communities, an insurance scheme for damaged assets such as fishing gear, safety nets, partial damage to boats and so on. Many fishers availed of these schemes, said Shinoj of CMFRI. "But in 2008, after cyclone Nisha, there was huge damage and the company had to pay all indemnities and suffered a financial loss as a result. The scheme is nonfunctional at present."

The government had in 2020 introduced a draft National Fisheries Policy that provided insurance cover for fishing assets such as gear and craft. The intention was to "help the fishers in offsetting the losses in times of natural calamities and other acts beyond their control", and comments were invited from stakeholders. But the policy has neither been finalised, or has an update been issued yet.

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