Government-sponsored innovation insurance could be used as a policy to offset possible undesirable income distribution effects associated with a fertilizer-intensive high yielding-variety strategy for agricultural development. Unequal income distributions are intensified if wealthy farmers accept profitable innovations while poor farmers do not, and such adoption patterns have been observed in some areas around the world. It has been suggested that one cause of this is the unwillingness and inability of poorer farmers to bear the risks associated with innovation. Crop insurance plans have been suggested as a measure to offset these risks. The mechanics of such a plan along with a method for basing insurance premiums on a limited amount of experimental data are discussed in this paper.