In India, 60% of the agricultural lands are still at the mercy of uncertain rains and with groundwater dwindling constantly, the need for agricultural insurance for its farmers is increasing day by day. Moreover, there is also the need to keep the design and presentation of various agricultural insurance schemes simple for easy comprehension.

Human beings don't like changes and neither can they deal with them very well. They become more despondent when it comes to facing uncertain climatic changes or disasters. Uncertain climatic condition during recent times has left many farmers poor and crippled, further leading to self-annihilation. However, with quick and early precautionary measures, farmers can easily avoid such catastrophe. These lifesaving measures should start with taking agricultural insurance which brings about a huge difference in the relief and rehabilitation of the affected farmers. Moreover, agricultural insurance makes sense for India, where 65% of the cropped area depends on rain. This type of insurance cover not only reduces the vulnerability of farmers who face natural disasters, pests and diseases, but it also allows long-term continuous individual development of the farms, smoothening the economic impact of nature or markets or hazards on crops and livestock. Therefore, understanding agricultural risk and finding various means to manage it deserves a serious attention. This article is an effort to bring this aspect to the readers' attention.

The Indian economy entirely depends upon the well-being of farmers. Therefore, the need of the hour is to encourage each of them to adopt agricultural insurance and avail its benefits. But the main sources of rural credit in India have been the institutional sources such as banks, cooperatives and then other professional and individual sources such as moneylenders, traders, friends and relatives. These credit sources are used for working capital or for investment whereas loans to help tide over bad times are not still officially offered by institutional lenders. At the most, these institutions reschedule the loans against any loss of crops, but doesn't specifically reschedule against any untoward risk. These institutional loans are also not used for productive purposes as they are fungibles and are often diverted to alternative uses. Such practices leave a wider scope for the insurance sector to cover untoward seasonal risk which is very frequent in India.

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