The Theoretical Perspective of Agricultural Insurance and the Policy Application in India

Abstract

Agricultural sector has faced many challenges since the middle of 1990s. Often described as the agrarian crisis, the acute challenges has forced many farmers to recourse to the extreme step of committing suicide. Policy response of the government in the last few years can be seen in the shift of emphasis from farm production to farmers income and wellbeing. One of the components of government policies in this regard is to promote crop insurance for mitigating uncertainties of farmers. Since the market will not provide coverage against the production risk, therefore government has come up with crop insurance programme. Although government of India initiated crop insurance way back in 1970s they met with limited success as the coverage of most of the schemes remained very low.