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Determining farmers’ real demand for crop insurance is difficult, especially in developing countries, where there is a lack of formal financial sector integration and a high reliance on informal risk mitigation options. We provide some new estimates of farmers’ willingness‐to‐pay for insurance in the context of a large‐scale subsidised programme in India. We conducted a discrete choice experiment with agricultural households across four states in India, enabling us to estimate preferences for specific insurance policy attributes such as coverage period, method of loss assessment, timing of indemnity payments and the cost of insurance. Our results suggest that farmers do value crop insurance under certain conditions and some are willing to pay a premium for such coverage in excess of the subsidised rates they are currently required to pay under this programme. In particular, farmers value the assurances that they will receive timely payouts when they incur losses, and may not have a strong preference for the method with which losses are assessed. On the other hand, farmers are quite sensitive to coverage periods. Our baseline assessment shows that when optimised to farmer requirements, there can be a sizeable demand for crop insurance by developing country farmers.

The government in Nepal faces double burden of enhancing fertilizer application rates in the country by investing in efforts to boost demand and at the same time, managing its dependence on global markets to fulfill the supply of important nutrients such as Urea and DAP. Without an understanding of the true valuation of fertilizers for farmers, achieving this balance would be difficult. We use Becker-DeGroot-Marshak value elicitation methods to derive the intrinsic value that farmers in Nepal place on fertilizers. Eliciting values under three distinct procurement scenarios, we are able to decompose the total intrinsic value of fertilizer into a willingness-to-pay (WTP) to travel to procure fertilizer, a WTP for assured fertilizer supplies, and a WTP for the productivity benefits of fertilizer. Disaggregating our sample according to location (hills versus terai), we are able to estimate differences in total intrinsic value as well as value components along these geographical dimensions. While farmers in the hills are generally willing to pay more for urea than their counterparts in the terai, the total amount they are willing to pay is, on average, less than the market price for urea. We explore heterogeneity in valuations and discuss the implications of our findings on fertilizer procurement and distribution policies, as well as direct support policies that the Nepal government may consider. While support policies such as subsidies may encourage increased utilization of fertilizers, policies that lower barriers to private sector entry and increase the density of fertilizer retailers could also increase fertilizer utilization.

India has one of the largest agricultural input support programs in the world, delivered in the form of subsidies to farmers, raising concerns about its sustainability. This paper evaluates the performance of one such support, the micronutrient subsidy program in the state of Andhra Pradesh (AP) and presents a case for providing this support in the form of direct cash transfers. Under the program, key soil micronutrients- zinc, boron, and gypsum were distributed free of cost to farmers living in micronutrient-deficient areas, with identification and targeting managed entirely by the state. We survey 1621 farmers, 61 agriculture extension officers, and 78 agriculture input dealers to assess the efficacy of the program and to identify bottlenecks preventing effective targeting, with a focus on zinc. We find that use of non-subsidized zinc is high in AP, and awareness of benefits of zinc and physical access to input dealer shops are significant predictors of zinc use. We argue that the free provision of micronutrients may have created demand among farmers, but there is little justification to continue subsidizing such a program at such high rates or resorting to public distribution. We find that micronutrient procurement and distribution has become a burden on extension staff and crowds out the private sector. Our analysis shows that the subsidy can benefit more farmers if it is channeled through the network of private fertilizer dealers. We use administrative data on budgetary outlays and digital soil maps to suggest fiscal redistribution in the form of direct cash transfers that may ensure more effective targeting at a lower cost to the state.

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