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.


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