Crop Insurance

Only available on StudyMode
  • Download(s) : 60
  • Published : January 27, 2013
Open Document
Text Preview
CROP INSURANCE: A Tool to save Farmers from Calamities

EXECUTIVE SUMMARY

Crop insurance is one of the various types of insurance that are offered to the people. This insurance is directed to the farmers and agriculturists. This Crop insurance scheme has been going on since the time of Kharif 1985. This insurance offers financial assistance for risk management in agriculture.

This insurance policy is a relief scheme for the farmers whose crops get spoiled during natural catastrophe. The insurance amount that is offered to the farmers is equal to the loan amount that has been disbursed to them. A certain amount of premium is charged against the crop insurance. The loss that is incurred due to natural calamities is met by the Government of India. It is to be noted that the insurance covers only one crop. The crop insurance does not cover financial assistance to multiple crops.

Crop insurance services are offered to the farmers for better production of the crops and introduction of modern technologies. Top quality services are rendered to the farmers and clients. The risk factor that is involved with the production of the crops has reduced much because of the introduction of this insurance policy.

Lala Lajpatrai College of Commerce and Economics

1

CROP INSURANCE: A Tool to save Farmers from Calamities

INSURANCE IN INDIA

What is insurance?
We face a lot of risks in our daily lives. Some of these lead to financial losses. Insurance is a way of protecting against these financial losses. For a payment (premium), an insurance company will take the responsibility of compensating your financial losses.

Insurance in its basic form is defined as “ A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."

What is General Insurance?

Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident and Health Insurance, and liability insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc.

Lala Lajpatrai College of Commerce and Economics

2

CROP INSURANCE: A Tool to save Farmers from Calamities

METHODOLOGY
PRIMARY DATA:

I have not collected any project resources through primary data.

SECONDARY DATA:

I have collected the above and following project resources from books related to insurance sector which were provided by library and from websites on Internet.
The above secondary data information is given in detail in bibliography and webliography.

Lala Lajpatrai College of Commerce and Economics

3

CROP INSURANCE: A Tool to save Farmers from Calamities

CROP INSURANCE
Agriculture production and farm incomes in India are frequently affected by natural disasters such as droughts, floods, cyclones, storms, landslides and earthquakes. Susceptibility of agriculture to these disasters is compounded by the outbreak of epidemics and man-made disasters such as fire, sale of spurious seeds, fertilizers and pesticides, price crashes etc. All these events severely affect farmers through loss in production and farm income, and they are beyond the control of the farmers. With the growing commercialization of agriculture, the magnitude of loss due to unfavorable eventualities is increasing. The question is how to protect farmers by minimizing such losses. For a section of farming community, the minimum support prices for certain crops provide a measure of income stability. But most of the crops and in most of the states MSP is not implemented.

In recent times, mechanisms like contract farming and future’s trading have been established which are expected to provide some insurance against price fluctuations...
tracking img