FARM INSURANCE

Agricultural and Related Insurances

Agriculture in India is characterized by small holdings, ill-structured institutional credit, unpredictable market fluctuations and ineffective extension systems frequent outbreak of crop diseases in addition to natural disasters like cyclones, floods, drought and hailstorms the context of increasing risk in different fields of agriculture, risk insurance is recognized as the most effective instrument for minimising farmers distress. Insurance is a mechanism to protect farmers, against the uncertainties in crop production due to natural factors, which are beyond farmer’s control. It is also a financial mechanism, which minimizes the uncertainty of loss in crop production, by factoring in a large number of uncertainties, which impact crop yields distributing the loss burden. It also maintains stability in farm income through promoting technology; encouraging investment and increasing credit flow in the agricultural sector. In short,  crop insurance acts as a shock absorb of cushion the shock absorb of farmer’s economic loss arising from natural calamities.  A variety of insurance schemes exist in the field of agriculture, animal husbandry and fisheries sectors. Following are some of the insurance schemes being implemented by the Central Government, State Government and public sector insurance companies in India.

There are two major providers of insurance schemes in India for the agricultural sector.

1. Central sector agricultural insurance schemes implemented by the Agricultural Insurance Company of India,
2. The state government

Besides group insurance and personal insurance schemes are also offered to different categories such as fishermen, coir workers etc.  Insurance on irrigation equipment and machinery are also implemented by the public sector general insurance companies such as New India Assurance Company.

The broad classification of the important insurance schemes offered by different agencies in Kerala are listed below.

Types of insurances

Last updated: 04-1-2008