Horti-Business Management (2+0)

3. Steps against Risk and uncertainty

i. Diversification

• Diversification means growing two or more crops or allied enterprises to avoid the yield and price uncertainty of depending on a single crop or enterprise. Eg; diversification with crop and livestock is very common.
ii. Insurance

• Farmers can insure their crops against losses due to storm, fire or pests and diseases. In India, Agriculture Insurance Company of India Limited (AIC) incorporated in 2002 offers yield-based and weather-based crop insurance programs in almost 500 districts of India. It covers almost 20 million farmers, making it the biggest crop insurer in the world in terms of the number of farmers served. The National Agriculture Insurance Scheme (NAIS) is compulsory for all farmers who take agricultural loans from any financial institution. It is voluntary for all other farmers. The premium is subsidized for farmers who own less than two hectares of land. This insurance follows the area approach.
iii. Flexibility

• Flexibility means the provisions in a farm plan to transfer resources from one enterprise to another enterprise without difficulty in order to gain larger profit. Transfer of resources become necessary because of anticipated losses in one enterprise or an anticipated rise in profit in another enterprise or both.
iv. Contracts

• Contracts are made with input supplying agencies or for selling farm products to safeguard against fluctuations in prices.