Bottom line of crop insurance

The fundamental problem with Indian agriculture is that farmers face as many yield risks as price risks. No other sector can claim this level of uncertainty at almost every level of operation. These risks assume higher proportions given productivity and technology lacunae and affect the economy as a whole due to the agriculture sector’s extensive linkages. But de-risking agriculture does not begin or end with insurance. ‘No risk, no gain’ may be an old adage but true wisdom involves diversifying, insuring and managing risk. The country will do well if farmers are educated about and heed this advice. This book is now more important than ever, since insurance was made compulsory for borrowing farmers with defaulters not being entitled to claim insurance; insurers defining areas for each notified crop for calamities excluded many isolated cases of crop failure; and adverse selection of crops by farmers continued on account of information asymmetries. This book serves as a guide to pursuing crop insurance and also highlights a number of exchange-specific problems to explain the inefficiencies in futures markets. In short, this book offers solutions to various complex technical problems relating to crop insurance and claims. It offers a holistic, long-term approach on the perception of Indian agriculture.