Risk aversion level influence on farmer's decision to participate in crop insurance: A review

Yanuarti, Rizky; Aji, Joni Murti Mulyo; Rondhi, Mohammad

doi:10.17221/93/2019-agricecon

Cited by 35 publications

(26 citation statements)

References 14 publications

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“…This ambiguity has been discussed by Peng and Pang (2019), who found that farmers' risk aversion increased with the farm size. In contrast with our research finding, Lyu and Barré (2017); Belissa et al (2019) and Yanuarti et al (2019) have found that farmer's risk aversion level had a significant influence towards their decision to participate in insurance. Farmers with high risk aversion would be willing to join agricultural insurance.…”

Section: Resultscontrasting

confidence: 99%

Risk Aversion, Risk Preference and Farmers’ Decision to Participate in Broiler Contract Farming: A Case Study in Jember, Indonesia

Rondhi

Aji

Khasan

et al. 2020

Caraka Tani J. Sustain. Agric.

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<p>The demand for broiler is rising rapidly due to its capability as the main animal protein source. In contrast, the production of broiler meat is unstable due to the possibility of farm risk. Contract Farming (CF) is one of the risk management tools for farmers but has not been used effectively. The purpose of this study was to analyze the factors that influence farmers’ decision to participate in CF. The analysis used six independent variables, namely farmer’s age, farm size, household size, education, farmer’s risk preference and risk aversion level. This study used primary data from 70 broiler farmers in Jember, which were divided into two groups, contract farmer and independent farmer. Each group had the same number of respondents. The results show that five among six independent variables significantly affected farmers’ decision to take part in CF. Farmer’s age decreased farmer’s probability to participate in CF, while education, farm size, household size and risk preference had positive effects. Farmer’s risk aversion level did not have any significant effect. The results suggest that the effort to expand CF participation should focus on young and educated farmers with large farm size.</p>

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Section: Resultscontrasting

confidence: 99%

Risk Aversion, Risk Preference and Farmers’ Decision to Participate in Broiler Contract Farming: A Case Study in Jember, Indonesia

Rondhi

Aji

Khasan

et al. 2020

Caraka Tani J. Sustain. Agric.

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“…The impact of AISP on farmers’ income is mainly manifested in reducing income fluctuation. Research shows that the agricultural production income of subsidized farmers is more stable after purchasing insurance [ 2 , 3 ]. Agricultural insurance can play a role in hedging risks when the grain yield or the price of grain falls [ 4 ] and compensate farmers for losses through a compensation mechanism.…”

Section: Literature Reviewmentioning

confidence: 99%

Fiscal Policy Dilemma in Resolving Agricultural Risks: Evidence from China’s Agricultural Insurance Subsidy Pilot

Gao

Shu

Cao

et al. 2021

IJERPH

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The agricultural insurance subsidy policy (AISP) encourages farmers to expand production scale by mitigating production risks. Under the high-input production patterns of traditional agriculture, the implementation of AISP is conducive to increase farmers’ income, but it also leads to the destruction of the agricultural environment. Achieving agricultural green development (AGD) has been hindered in China. In this context, this paper attempts to analyze the impact of AISP on farmers’ income and the agricultural environment. Based on the panel data of 316 prefecture-level cities from 2003 to 2012 in China, this paper empirically tests the effects of AISP by employing methods such as time-varying difference-in-difference (DID). The results show that AISP has significantly promoted the growth of farmers’ incomes but has negatively impacted the agricultural environment. Furthermore, the mechanism analysis shows that the policy effects are realized by affecting the quantity of main productive fixed assets (Mpfa) and grain sown area per capita (Gsa). In addition, the policy effect is heterogeneous in different regions. Therefore, the government should appropriately raise the subsidy standard for farmers who adopt environmental-friendly production patterns. At the same time, the government should give more subsidies to the large grain-producing areas.

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“…Farmers well receive this program because it helps them provide farming capital for the next planting season when they experience failure in farming [26]. However, farmer participation in this program is low, even though the government subsidized the premium by 80% [27]. It shows that a more comprehensive policy framework and a careful implementation of that policy are required to mitigate the impact of climate change on rice farming in Indonesia.…”

Section: Overview Of Indonesian Rice Farmingmentioning

confidence: 99%

Improving the Efficacy of Climate Policy in the Indonesian Rice Sector: The Potential Use of Perceived-Impact Measures in Targeting Policy Beneficiaries

Rokhani¹,

Rondhi²,

Suwandari³

et al. 2021

Recent Advances in Rice Research

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Climate change (CC) increases the frequency of flood and drought and is a significant threat to smallholder rice farming in Indonesia. Adapting to these changes is crucial to minimize the damages to the Indonesian food system. Accordingly, the Indonesian government has formulated National Adaptation Plans (NAPs) to mitigate the effect of climate change on priority sectors, including rice farming. To this end, the Indonesian government included climate change adaptation into the National Development Plan (2019–2024). Selecting the appropriate beneficiaries of this program is crucial to improve the efficacy of Indonesian climate policy. In the case of rice farming, farmers with a high probability to adapt are the appropriate beneficiaries of this program. Thus, this chapter aimed to identify the characteristics of Indonesian smallholder rice farmers with a high probability to adapt to climate change. To this end, this chapter used the findings of the study on 87,330 rice farmers in Indonesia. Education, gender, land tenure security, presence of irrigation infrastructure, application of chemical fertilizer, cropping system, access to extension services, and participation in farmer group are significant determinants of adaptation practices. The finding suggests that prioritizing farmers based on these characteristics are crucial to improve the efficacy of climate policy.

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Risk aversion level influence on farmer's decision to participate in crop insurance: A review

Cited by 35 publications

References 14 publications

Risk Aversion, Risk Preference and Farmers’ Decision to Participate in Broiler Contract Farming: A Case Study in Jember, Indonesia

Risk Aversion, Risk Preference and Farmers’ Decision to Participate in Broiler Contract Farming: A Case Study in Jember, Indonesia

Fiscal Policy Dilemma in Resolving Agricultural Risks: Evidence from China’s Agricultural Insurance Subsidy Pilot

Improving the Efficacy of Climate Policy in the Indonesian Rice Sector: The Potential Use of Perceived-Impact Measures in Targeting Policy Beneficiaries

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