Insuring against climatic shocks: Evidence on farm households’ willingness to pay for rainfall insurance product in rural India

Senapati, Asis Kumar

doi:10.1016/j.ijdrr.2019.101351

Cited by 18 publications

(6 citation statements)

References 25 publications

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“…An increase in farmers' knowledge of agricultural insurance by one unit increases willingness to pay by Ksh 8,392. These results are consistent with [2,16,29] who found a positive and significant association between WTP and awareness in Northern Ghana, Burkina Faso and Cuttack district, respectively. However, the results contradict [29], who found a significant and negative relationship in Bolangir district.…”

Section: Variables Probit Modelsupporting

confidence: 90%

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Determinants of Khat Farmers' Willingness to Pay for Agricultural Insurance

Muraya,

Chege,

Munyiri

2024

IJAE

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Khat farming is an important source of revenue and a possible source of potential investment in Kenya. Despite the benefits, various production and marketing risks, which negatively influence productivity, profitability, economic growth and farmers' livelihood, remains a challenge. Insurance for agricultural enterprises has the ability to open up access to essential services that boost productivity and marketing. This study aimed at determining the effect of socio-economic and institutional factors on khat farmers' willingness to pay for agricultural insurance. The data used in this study was obtained from khat farmers in Meru County, Kenya, from a sample of 323 farmers. The study employed the utility maximization theory and the double-bounded dichotomous choice model. Empirical results propose that the household size, size of land owned, awareness of agricultural insurance, credit access and the amount of khat bushes possessed by the family positively and significantly affected willingness to pay. The farmer's age and income earned from khat production negatively and significantly influenced willingness to pay. This study concluded that awareness of agricultural insurance and credit access greatly influence khat farmers' willingness to pay. The study recommends improving farmers' credit facilities to allow them access more financial capability since the study showed that the willingness to pay for insurance was proportional to credit access. The study further recommends strengthening on awareness on the importance of agricultural insurance to enhance khat farmers' involvement in agricultural insurance scheme. The results of this study will equip decision-makers with evidence-based tools to excellently market and establish demand-driven insurance products to meet the demands of khat farmers.

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Section: Variables Probit Modelsupporting

confidence: 90%

“…The results are consistent with [2,16,26] found farm size had a positive and significant influence on willingness to pay for crop insurance. However, the results contradict [29], who revealed that farm size negatively influences WTI and WTP amounts for rainfall insurance products in rural India.…”

Section: Variables Probit Modelcontrasting

confidence: 70%

Determinants of Khat Farmers' Willingness to Pay for Agricultural Insurance

Muraya,

Chege,

Munyiri

2024

IJAE

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“…Farm households are sensitive to idiosyncratic shocks like disease or yield loss due to poor soil quality and 'covariate shocks' like flooding, drought, or natural calamities. According to Senapati (2020), rural families are vulnerable to both idiosyncratic shocks, such as injuries, disease or yield loss, fire or theft experienced by a single household, and covariate shocks, such as flood, drought, or natural catastrophe encountered by all households in a particular area.…”

Section: Literature Reviewmentioning

confidence: 99%

Factors Influencing the Paddy Farmers' Intention to Purchase Crop Insurance: A Study Case in Kedah

Johari,

Saili,

Ahmad

et al. 2024

IJARBSS

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Agricultural risks in Malaysia are caused by a range of variables, including climate unpredictability and change, uncertainty in yields and pricing, an imperfect market, inaccessibility to financial services, and a lack of risk mitigation measures. Crop insurance may be a significant formal document for rural farmers in developing countries to reduce alternative risks and protect against production hazards caused by climate and weather change. This study examines the factors that influence paddy farmers' intention to purchase agriculture crop insurance in Pokok Sena, Kedah. One hundred eleven paddy farmers with farmland size under 1 hectare are selected, and a structured questionnaire is used to collect data from the respondents. The data are analysed with descriptive statistics, correlation, multiple linear regression, and ANOVA analysis. The significant variables influencing paddy farmers' intention to purchase crop insurance are knowledge, risk attitude, and social factors, with a p-value of 0.038, 0.001, and 0.001, respectively. The highest factors influencing paddy

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“…In addition to basis risk, these studies have found that factors affecting levels of risk aversion, such as income and prior familiarity with weather derivatives, also influence willingness-to-pay. More recently, prior experience with extreme weather events has been found to contribute positively to willingness-to-pay for weather derivatives (Liu et al, 2019; Senapati, 2020). Hence, increased volatility and occurrence of extreme weather events associated with climate change can have a significant impact on viticulture (Jones et al, 2022; Ashenfelter and Storchmann, 2016; Van Leeuwen and Darriet, 2016), and the growing awareness on the part of producers (Demberger, 2017; Mercer, 2018) may ultimately contribute to a greater usage of weather contracts.…”

Section: Introductionmentioning

confidence: 99%

Potential use of weather derivatives in hedging aggregate viticulture yields: An analysis of the Niagara region of Canada

Cyr,

Kushner,

Zhang

2023

J Wine Econ

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Although potentially useful for financially hedging systemic weather-related risks, weather contracts/derivatives (also referred to as parametric insurance) have not seen wide adoption in agriculture outside of applications in developing countries, frequently supported by governments and non-governmental organizations (NGOs). A significant impediment is the lack of financial firms willing to stand ready to sell weather derivatives to individual agricultural producers in the over-the-counter market who, due to the localized nature of weather, face idiosyncratic weather-related risks. In particular, the administrative and reinsurance costs of supplying relatively small contracts with specific terms to many different producers are often prohibitive. The current study considers the potential use of weather derivatives in hedging the aggregate yield/revenues of viticulture producers represented by an industry association located in the province of Ontario, Canada. We examine the sensitivity of aggregate industry yields to several relevant weather-related risks employing copula function analysis. We then consider the potential of a weather derivative in hedging the financial risk associated with cold winter temperatures, which pose the greatest risk to aggregate vinifera yields. The issue of attributing costs and payouts to individual association members remains unresolved, and several alternatives are suggested.

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Insuring against climatic shocks: Evidence on farm households’ willingness to pay for rainfall insurance product in rural India

Cited by 18 publications

References 25 publications

Determinants of Khat Farmers' Willingness to Pay for Agricultural Insurance

Determinants of Khat Farmers' Willingness to Pay for Agricultural Insurance

Factors Influencing the Paddy Farmers' Intention to Purchase Crop Insurance: A Study Case in Kedah

Potential use of weather derivatives in hedging aggregate viticulture yields: An analysis of the Niagara region of Canada

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Insuring against climatic shocks: Evidence on farm households’ willingness to pay for rainfall insurance product in rural India

Cited by 18 publications

References 25 publications

Determinants of Khat Farmers&apos; Willingness to Pay for Agricultural Insurance

Determinants of Khat Farmers&apos; Willingness to Pay for Agricultural Insurance

Factors Influencing the Paddy Farmers' Intention to Purchase Crop Insurance: A Study Case in Kedah

Potential use of weather derivatives in hedging aggregate viticulture yields: An analysis of the Niagara region of Canada

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Product

Resources

About

Determinants of Khat Farmers' Willingness to Pay for Agricultural Insurance

Determinants of Khat Farmers' Willingness to Pay for Agricultural Insurance