Insurance in Agriculture – Evolution & Trend

The Indian farmer does his business of production and sale of agricultural product under
numerous constraints, risks and complex situations. Under these conditions, recovering the
amount invested in the activity, earning for yearly expenses of the family and making a profit
becomes difficult.
To add to the woes, behavioral impact of family members, peers, fellow villagers,
subordinate laborers, Gram Panchayats, Bank and others Government Officers and their
apathy, generally are unfavorable mainly for small, marginal and medium sized farmers.
Thus there is an extremely pressing need for insuring the farmers and their businesses from
the ensuing risks.
In any industry or business activity, pricing of the end product forms the most important
decision. The way the pricing is done can decide whether the business is successful or not.
There have been various methods of pricing that have been designed for various industries,
depending on the constraints and benefits specific to the industry.
The present paper attempts to critically analyse the crop insurance scenario in India with
reference to past experiences and take a brief view of the insurance in agricultural sector in
some of the developed countries.
Key words :Crop Insurance, risk, agriculture, NAIS, AICI