In addition to its critical importance for the world population, the agricultural sector has a unique structure as a field of activity that is extremely sensitive and highly affected by economic, social, political, technological and personal risks. From this point of view, the effective fulfilment of the function of agriculture in feeding humanity is directly related to the management of risks that threaten agricultural production. For this reason, developed countries share and transfer risks through various protection policies, "Risk Management Programmes" and "Agricultural Insurance Practices", which have an important place in these programmes. In our country, in order to guarantee the risks threatening the agricultural sector, an insurance mechanism was considered to be put into effect and for this purpose, the "Agricultural Insurance Law" dated 14/06/2005 and numbered 5363 was enacted.
An Insurance Pool was established in order to ensure standardization in insurance contracts to be made in relation to the risks covered by the Law, to create a suitable environment for the transfer of risk under the best conditions, to pay indemnity from a single center in case of damages, and to develop and expand agricultural insurance. All business and operations related to this Pool are carried out by Agricultural Insurance Pool Management Company in which insurance companies participating in this Pool are equal shareholders. Insurance companies conduct agricultural insurance contracts on behalf of the Pool and on the basis of standard policies determined by the Pool and transfer the entire premium and risk to the Pool. The state provides support for insurance premiums on behalf of the farmer exclusively for insurance contracts to be concluded under this Law. The amount of state premium support will be determined by the President of the Republic for each year by product, risk, region and enterprise scale. With the Pool Implementation, it will be ensured that catastrophic risks such as drought and frost, which cannot be undertaken by an insurance company alone, can be covered; reinsurance capacity and scope will be expanded by encouraging reinsurance participation; information, personnel and financial resources of insurance companies will be used more efficiently as partners; premium and excess of loss support of the state will be used effectively; unfair competition in prices will be prevented and participation in insurance will be increased.