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Abstract
The enterprise of agriculture is subject to lot many uncertainties. Still, more people in
India earn their livelihood from this sector, than from all other economic sectors put
together. Agricultural associated with several risks which include adverse changes in both
input and output prices, Agricultural risk can be categorized as production risk, price or
market, financial or credit, and institutional risks etc. The farmers are not assured of good
quality and disease free crop which is essential for obtaining reasonable yield sufficient to
recover expenses. Crop insurance is one of the major management strategies to overcome
risk to greater extent. It is regarded as an essential part of well rounded agricultural programme
designed to provide protection to farmers against physical failure of crops due to weather and
other unavoidable natural hazards. Compared to other traditional risk reducing strategies, such as
crop diversification, inter-cropping, mixed farming, integration of farm etc., available to farmers
crop insurance is more efficient. If a farmer is assured of financial compensation when his
income is considerably low for reasons beyond his control, he would more likely allocate his
resources in a manner that would maximize his return. Crop insurance not only helps the
farmers to withstand the shock from uncertain situation but also acts as incentive to use the
resources efficiently and achieve higher level of productivity. It is important for us to encourage
farmers to get into the crop insurance scheme so that there will be some amount of assured
income for them in case of any unexpected loss in production process.