Agriculture is the oldest occupation and is primary sector of the economy. Industrialisation and technological upgrading has increased the degree of risks in agriculture. The risks to be scaled up continuously to bring the much needed prosperity in the rural economy.

The risks in agriculture are classified under production risk, pest risks, market risk, investment and credit risk, institutional risk, technology risks and personal risks. Production risks include rainfall, temperature variation, frost, solar radiation, wind and vapor pressure pest risks include soil, its fertility, PH texture, physiology, phonology and morphology, farmyard manners, pest management and irrigation.

Agriculture Insurance Company of India Limited (AIC) :

The Government and the Agriculture Insurance Company of India Limited (AIC) have passed through the learning curve in all areas of crop insurance and are looking to make crop insurance reachable and affordable to a majority of cultivators.

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Based on the data supplied by Indian Agriculture Research Institute (IARI), AIC is able to offer products on climate variation and vocational differences in around 250 locations spread over around 50 districts of the country.

AIC has been experimenting with unique insurance models in the management of crop insurance. AIC has kept management costs below a level of 2% and intermediary costs of low level. It has used the large banking network numbering 1.5 lakhs branches of commercial banks.

Cooperative Banks and Rural Banks and Primary Agricultural Cooperative societies AIC has collaborator with the various Boards and Authorizes in the agriculture sector such as the Coffee, Rubber, Coconut, Spices Boards, Floriculture and all types of plantations.

Index based weather insurance is rapidly gaining interest in India. More than 5,00,000 Indian farmers have taken weather insurance policies through schemes provided by AIC and private sector insurance companies including ICICI Lombard and IFFCO Tokyo, Swiss Reinsuring the schemes of micro-finance.

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AIC is actively promoting crop insurance, strengthening marketing, education and awareness of the benefits of insurance.