Willingness to Pay for Livestock Husbandry Insurance: An Empirical Analysis of Grassland Farms in Inner Mongolia, China

Abstract

Livestock husbandry insurance (LHI) is increasingly gaining acceptance in developing countries, relative to its efficacy in mitigating the covariate risks faced by households in vulnerable agrarian communities. However, this risk-mitigating tool has received little research attention in the context of Chinese herders. The current study focused on the status, and determinants of herders’ willingness to purchase LHI. We used a contingent valuation approach to collect data from 450 households across three grassland types in Inner Mongolia. Descriptive statistics and binary logistic regression models were used to analyze the collected data. We show that herders’ level of awareness and acceptance of LHI are below expectations. Our results further indicated that herders with higher education level, livestock number, risk perception level, awareness, and contracted grassland area are more likely to purchase LHI. Policymakers and insurers should design programs that will educate herders on LHI while taking cognizance of other critical factors that influence households to purchase insurance. This will go a long way in scaling-up the attractiveness of LHI to herders and the agrarian community at large.

Factors Affecting Farmers’ Willingness to Pay for Agricultural Insurance: A Literature Survey (2004-2023)

“…Herd size, according to the literature review, had negative impact on WTP for agriculture insurance in two studies (Abebe & Bogale, 2014;Akintunde, 2015) while positively related to WTP for insurance in seven studies (Dong et al, 2020;Ghazanfar et al, 2015;Madaki et al, 2023;Mehmood et al, 2022;Nugrahaini et al, 2021;Subedi & Kattel, 2022;Xiu et al, 2012). Likewise, livestock ownership was found to be negatively affecting the adoption of agriculture insurance in a study (Madaki et al, 2023).…”

“…Previous literature indicates that the age of farmers had a beneficial influence on their willingness to pay for livestock insurance in 15 investigations (Adjabui et al, 2019;Akintunde, 2015;Ali, 2013;Danso-Abbeam et al, 2014;Dong, Jimoh, Hou, & Hou, 2020;Ghazanfar, Wen, Abdullah, Ahmad, & Khan, 2015;Indra, Ula, & Nugroho, 2023;Jimoh Ibitoye, 2012;Kurniaty, Masyhuri, & Jamhari, 2021;Liu, Hou, Li, Min, & Mu, 2021;Manja, Chirwa, & Kambewa, 2015;Mensah et al, 2023;Musonda, 2012;Shang & Xiong, 2021;Teweldemedhin & Kafidi, 2009), while these 19 research revealed that older farmers were less likely to pay for livestock insurance, it was not clear why this was the case. (Abebe & Bogale, 2014;Aina et al, 2018;Amin, Abdullahi, Suryani, & Alias, 2014;Arshad et al, 2016;Dahal, Adhikari, & Khanal, 2022;Hill, Hoddinott, & Kumar, 2013;Kwadzo et al, 2013;Madaki et al, 2023;Mahboob, Rehman, Hamid, & Saeed, 2019;Mbonane & Makhura, 2018;Mutaqin & Usami, 2019;Nugrahaini, Masyhuri, & Suryantini, 2021;Oduniyi, Antwi, & Tekana, 2020;Ramasubramanian, 2012;Sadati et al, 2010;Sami, 2017;Singh, 2017;Sujarwo, 2017;Xiu, Xiu, & Bauer, 2012).…”

“…(Abebe & Bogale, 2014;Aina et al, 2018;Amin, Abdullahi, Suryani, & Alias, 2014;Arshad et al, 2016;Dahal, Adhikari, & Khanal, 2022;Hill, Hoddinott, & Kumar, 2013;Kwadzo et al, 2013;Madaki et al, 2023;Mahboob, Rehman, Hamid, & Saeed, 2019;Mbonane & Makhura, 2018;Mutaqin & Usami, 2019;Nugrahaini, Masyhuri, & Suryantini, 2021;Oduniyi, Antwi, & Tekana, 2020;Ramasubramanian, 2012;Sadati et al, 2010;Sami, 2017;Singh, 2017;Sujarwo, 2017;Xiu, Xiu, & Bauer, 2012). These 8 studies found a negative effect of sex/gender on WTP for agriculture insurance " (Akintunde, 2015;Budhathoki et al, 2019;Danso-Abbeam et al, 2014;Dong et al, 2020;Liu et al, 2021;Mbonane & Makhura, 2018;Nyaaba, Nkrumah-Ennin, & Anang, 2019;Xiu et al, 2012)" while had positive impact on WTP for insurance in several studies such as (Adjabui et al, 2019;Dahal et al, 2022;Hill et al, 2013;Jimoh Ibitoye, 2012;Madaki et al, 2023;Manja et al, 2015;Mensah et al, 2023;Mutaqin & Usami, 2019;Otieno, Oluoch-Kosura, Karugia, Drucker, & Rege, 2006;Teweldemedhin & Kafidi, 2009).…”

“…The more the chances to be willing to insure, the more educated the farmer is. Education positively influenced the propensity of farmers to pay for livestock insurance, according to these 23 studies " (Aina et al, 2018;Akintunde, 2015;Ali, 2013;Danso-Abbeam et al, 2014;Dong et al, 2020;Ellis, 2016;Ghazanfar et al, 2015;Gulseven, 2020;Indra et al, 2023;Jimoh Ibitoye, 2012;Kurniaty et al, 2021;Madaki et al, 2023;Manja et al, 2015;Mehmood, Ullah, e Ali, Baber, & Ashraf, 2022;Mohammed & Ortmann, 2005;Musonda, 2012;Mutaqin & Usami, 2019;Nugrahaini et al, 2021;O'Reilly, Bishu, Lahiff, & Gebregziabher, 2018;Sami, 2017;Singh, 2017;Suharyanto, Ansyor, & Hidayat, 2021;Sujarwo, 2017)" whereas 13 studies have demonstrated a negative correlation between education and farmers' "willingness to pay for livestock insurance (Adjabui et al, 2019;Arshad et al, 2016;Dahal et al, 2022;Khan, Chander, & Bardhan, 2013;Kwadzo et al, 2013;Mahboob et al, 2019;Mbonane & Makhura, 2018;Mensah et al, 2023;Nyaaba et al, 2019;Oduniyi et al, 2020;Shang & Xiong, 2021;Teweldemedhin & Kafidi, 2009;Xiu et al, 2012)". Sadati et al (2010) found a positive effect of literacy on the adoption of crop insurance.…”

Analysis of willingness to pay for forest insurance and its influencing factors: From the perspective of heterogeneous forestry operators

“…国外关于森林保险支付意愿的研究成果较为丰富。有学者指出林木所有者的意愿支 付费率远低于现有保险费率，这也是导致现行森林保险投保需求不足的重要原因 [1,2] ；有 学者指出农户对收入保险的意愿支付水平高于现行保费水平，因此应大力推广收入保险 制度的发展 [3] ；也有学者研究发现农户对以天气指数为基础的保险支付意愿高于全额保险 产品、比例覆盖保险产品等的其他保险类型 [4] 。同时，也有大量学者就影响农户支付意愿 的因素进行分析，指出对保险的认知度、受教育程度、风险感知水平、优惠捆绑信贷支 持、保险责任覆盖面、经营面积等会显著正向促进农户的支付意愿 [5][6][7] 。目前国内有关支 付意愿及影响因素的实证研究主要集中在农业保险 [8,9] ，且有少部分学者关注到了异质性 经营主体的差异 [10,11] ，这为本文的研究提供了方法和思路上的借鉴；关于森林保险支付意 愿及影响因素的研究较少 [12][13][14] ，有学者指出从供给方保费定价与需求方营林主体支付意愿 间缺口测算森林保险保费补贴规模 [15] ，但具体从供需双方的支付缺口对补贴规模进行实 证测算的研究目前还没有。同时，已有研究更注重传统小林农，针对新型林业经营主体 或针对两类异质性营林主体的差异分析较少；有学者指出，新型林业经营主体的经营规 模比传统小林农更大，所面临的林业风险及风险所致损失也相应更高，其对森林保险的 需求应更强烈，更有意愿参保 [16] ；但受限于当前低保障水平与财政补贴政策设计缺陷， 现行森林保险产品供给无法满足新型林业经营主体的基本风险管理需求 [17] ，这严重影响 了其参保与支付意愿，导致当前高比例的保费补贴政策对新型林业经营主体的激励效应 仍旧偏低 [18,19] ；也有学者指出在当前"低保障、广覆盖"的森林保险保费补贴政策下，财 政补贴对小林农的激励作用更强，而对新型林业经营主体的激励作用十分有限 [20]…”