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Crop Insurance- Strategy to minimize risk in Agriculture

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  • Shahi Kiran, A.S.
  • Umesh, Kotrakerebasegowda

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.

Suggested Citation

  • Shahi Kiran, A.S. & Umesh, Kotrakerebasegowda, 2012. "Crop Insurance- Strategy to minimize risk in Agriculture," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126734, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae12:126734
    DOI: 10.22004/ag.econ.126734
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    References listed on IDEAS

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    1. Jerry R. Skees & J. Roy Black & Barry J. Barnett, 1997. "Designing and Rating an Area Yield Crop Insurance Contract," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 430-438.
    2. Ralph R. Botts, 1962. "Federal Crop Insurance Tied to a Bushel-Quota Farm Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(3), pages 769-780.
    3. Nadkarni, M.V., 1971. "Yield Uncertainty in Maharashtra Agriculture," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 26(4), pages 1-8.
    4. Syed M. Ahsan & Ali A. G. Ali & N. John Kurian, 1982. "Toward a Theory of Agricultural Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(3), pages 510-529.
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    Cited by:

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    2. K.S. , A. & Khan, T. & Kishore, A., 2018. "Willingness to pay for Weather Based Crop Insurance in Punjab," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277516, International Association of Agricultural Economists.

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    Keywords

    Agricultural Finance; Crop Production/Industries;

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