CROP INSURANCE IN INDIA
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Abstract
Agriculture constitutes the backbone and forms an essential part of every economy. Despite its importance, it is still dependent on vagaries of nature. It is affected by number of natural disasters (floods, storms, cyclones, landslides, droughts and earthquakes) and man - made disasters like price crashes, fire and sale of spurious seeds, fertilizers and pesticides etc. All these events are beyond the control of farmers and affect farmers through loss in production and farm income. Agriculture Insurance is considered an important mechanism of protecting the farmers against financial losses to agriculture sector due to natural and man- made uncertainties. Crop Insurance is based on the principle of large number. The losses suffered by farmers in a particular locality are borne by farmers in other areas or the reserves accumulated through premium in good year can be used to pay the indemnities. Crop Insurance protects farmer’s investment in crop production and also improves the risk bearing capacity. It facilitates adoption of improved technologies and encourages higher investment in agricultural production.
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