​The two general categories of crop insurance are called​

Correct option is A

The correct answer is: (a) Crop-yield insurance and crop-revenue insurance

• Crop insurance is mainly divided into two categories:

  • Crop-yield insurance: Compensates farmers for losses due to a decline in actual yield below a specified threshold.

  • Crop-revenue insurance: Protects farmers against losses in farm income caused by both low yields and low prices.

These two categories provide comprehensive protection to farmers from both natural risks (like droughts or floods) and market risks (like price volatility).

• Crop-yield insurance includes coverage like Weather-Based Crop Insurance Scheme (WBCIS).

• Crop-revenue insurance is more common in countries like the USA, under programs like Revenue Protection (RP).

• In India, Pradhan Mantri Fasal Bima Yojana (PMFBY) combines elements of both types.

• Yield insurance covers specific perils like drought, flood, pest attack, etc.

• Revenue insurance accounts for yield × market price, offering broader protection.

• Insurance encourages risk-taking and investment in agriculture.