Indian economy is predominantly rural and agrarian with agriculture employing about 31 per cent of the work force. Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries and other categories. It aims to maximise return by investing in different areas that would each react differently to the same event.Agriculture and allied activities constitute the single largest contributor to the Gross Domestic Product (GDP), accounting for almost 33% of the total. They are vital to the national well-being as, besides providing the basic needs of the society and the raw materials for some of the important segments of Indian industry, they provide livelihood for almost two thirds of the work force. The share of the agricultural products in the total export earnings, both in primary and processed forms, is very significant. Over the last four decades, agriculture has made important strides in our country.