Search results

The purpose of this paper is to examine the effects of premium subsidies provided by the Brazilian government through the Rural Insurance Premium Subvention Program (PSR) on the quantity demanded for crop insurance by grains producers of southern Brazil.

A fixed effects model was applied to an unbalanced panel data of municipalities of southern Brazil considering the years between 2006 and 2015. Three measures of crop insurance demand were considered: level of total premiums, level of total premiums per hectare and level of total liability per hectare.

Results were in line with previous literature, suggesting the existence of a positive, although inelastic, effect of the subsidy level on the demand for crop insurance. However, unitary elasticity estimates were found for all grains when considered total premiums per hectare as crop insurance demand measure.

The investigation focuses on a crop insurance program conducted in a tropical developing country – a completely different background than previously analyzed in literature. In addition, Brazilian government considers the PSR as one of its most important agricultural programs and this paper is pioneer in empirically explain the huge public investments made to the PSR through the estimation of the effects of premium subsidies on the quantity demanded for crop insurance in Brazil.

The crop insurance purchase decision for a group of Kansas farmers is analyzed using farm‐level data from the 1990s, a period that experienced many changes in the federal crop insurance program. Results indicate a reduction in the elasticity of the demand for crop insurance with respect to premium rates by the end of the decade. The reduction in demand elasticity corresponded with a considerable increase in government subsidies by the end of the 1990s. This result may also reflect the attractiveness of new revenue insurance products which may have made producers less sensitive to premium changes.

The purpose of this paper is to investigate the demand for crop insurance. Moreover, farmer willingness to pay (WTP) for crop insurance was derived. Factors affecting the demand were also examined in a country where crop insurance products are not currently available. Sensitivity analysis was conducted by studying the price-anchoring effect.

Data from a choice experiment (CE) were analyzed with mixed logit models and the distribution of farmer WTP for crop insurance was derived. A split sample approach with varying premium vectors was used to analyze the price-anchoring effect.

Demand was revealed for crop insurance products in Finland. The demand was higher among younger farmers and farms with more arable land. WTP for crop insurance products was very sensitive to the premium interval presented in the CE design.

The price-anchoring effect may disrupt the market development of crop insurance products, because insurance companies may take advantage of the lack of awareness among farmers of crop insurance pricing.

The insurance product expected indemnity was a more important factor than the deductible in determining farmer WTP for crop insurance. Therefore, the 30 percent deductible level set for subsidized crop insurance products is not an obstacle for the development of such products in the EU.

The study applied a well-known method (CE) to crop insurance in a country where these products are non-existent. The split sample approach was used to examine the price-anchoring effect on crop insurance.

The purpose of this paper is to identify the factors that determine demand for crop insurance in Poland.

To examine the determinants of decisions regarding crop insurance, the authors used logistic regression. The base source of data for the analysis was the 2013 FADN sample. The scale of yield losses, the indemnities received and the Arrow-Pratt risk aversion coefficient were examined in a representative sample of farms in consecutive years in the period 2004-2013.

Losses are the major determinants of crop insurance uptake. Additionally, it was observed that the economic determinants are in line with the expected utility theory, while contrary to expectations, farmer’s characteristics such as education level, age or even risk aversion did not prove to have any influence on crop insurance uptake.

The FADN sample is representative as regards the type of farming, economic size of farm and location of the farm. Every farm in the sample represents a specific number of similar farms in the population. However, it must be emphasised that the representativeness of the sample with respect to other determinants, e.g., yield losses in previous years, using crop insurance or the farmers’ age and education has not been verified due to lack of data characterizing the general population with regard to these factors.

It could be argued that the system of crop insurance subsidies should be targeted to encourage the farmers who previously had not used insurance to join the system.

The paper presents the analysis of crop insurance uptake in a country with a strongly polarised agriculture. The Polish farm sector consists of 1.4 million farms with sizes ranging from 1 ha to over a few thousands hectares. The research is based on a data set of 5,202 farms which contains data from ten years (2004-2013). The novelty of the methodological approach is that it includes information on the number of farms represented by every farm in the FADN sample in the Horvitz-Thompson estimator in order to achieve results which are valid for the general population of Polish farms.

The purpose of this paper is to determine which factors influence the choice to adopt subsidized multi-peril crop insurance (MPCI) in the Netherlands and whether prior hail insurance uptake is one of the determinants of MPCI adoption. In addition, it is analyzed whether subsidized MPCI has reduced disaster relief spending.

Cross-sectional survey with 512 respondents using a stratified design comprising MPCI adopters and non-adopters sampled from the Dutch national census data base. The national census, including information on subsidized MPCI adoption from 2010 up to and including 2015, was supplemented with information on (prior) traditional market-based hail insurance uptake, and other underlying determining factors were elicited. Logistic regression analysis was used to determine which factors influence the choice to adopt MPCI.

Analysis of MPCI adoption reveals that subsidized MPCI mainly substituted for market-based hail insurance uptake up to now. Growers who did not insure against hail in the past were hardly reached. Approximately, three-quarter of MPCI adopters insured hail prior to market introduction of MPCI. In the arable sector, MPCI adoption was 2.89 (p<0.01) more likely for prior hail insurance adopters compared to non-adopters, while it was 9.67 (p<0.01) more likely in the fruit sector.

In the arable sector, it is expected that MPCI uptake in the coming years will reach more prior non-adopters of hail insurance as demand is expected to increase. Prior hail insurance adopters in the arable sector can be seen as the early MPCI adopters. In the fruit sector, adoption rates are already at a relative high level and a further significant increase by targeting non-adopters of hail insurance is not likely.

Governmental support has crowded out to some extend traditional market-based hail insurance in the Netherlands. Since the Common Agricultural Policy of the European Union is creating more momentum to subsidize crop insurance more member states with a long history of a mature hail insurance market may be confronted with similar crowding-out effects.

Since 1980, the principal form of crop loss assistance in the United States has been provided through the Federal Crop Insurance Program. The Federal Crop Insurance Act of 1980 was intended to replace disaster programs with a subsidized insurance program that farmers could depend on in the event of crop losses. Crop insurance was seen as preferable to disaster assistance because it was less costly and hence could be provided to more producers, was less likely to encourage moral hazard, and less likely to encourage producers to plant crops on marginal lands. Despite substantial growth in the program, the crop insurance program has failed to replace other disaster programs as the sole form of assistance. Over the past 20 years, producers received an estimated $15 billion in supplemental disaster payments in addition to $22 billion in crop insurance indemnities.

The purpose of this paper is to investigate the role of crop insurance among Hungarian crop farmers and the responses to the introduction of the two-scheme risk management system. Specifically, first, it examines the economic and environmental factors affecting the willingness of farmers to contract crop insurance. Second, it reveals the relationship between having crop insurance and technical efficiency of crop producing farms.

Probit models of panel data are applied to explore the factors of insurance decisions. The relationship between efficiency and insurance is investigated with two-stage data envelopment analysis (DEA) model with double bootstrap using panel data for the 2001 to 2014 period.

The results of Probit model estimations show that the education, the size, the indebtedness of crop producing farms and the new two-scheme risk management system are in positive correlation, while the concentration of farming activity are in negative correlation with the crop insurance contracting. The estimations of two-stage DEA model reveal that crop producing farms with an agricultural insurance contract are more efficient than the farmers without using this risk management tool.

Empirical investigation of the influencing factors of agricultural insurance demand in Hungary and the examination of the relationship between insurance and technical efficiency may contribute to the development of Hungarian risk management system.

This research examines factors influencing the adoption of crop and revenue insurance. This is accomplished by estimating a multinomial logit model of insurance choices facing U.S. farmers. Results indicate significant differences in the probabilities of adoption of each insurance plan. The levels of selected explanatory variables, such as operator’s education level, debt‐to‐asset ratio, off‐farm income, soil productivity, participation in production and marketing contracts, and type of farm ownership, appear to be the determinants of the probability of having adopted each insurance plan.

The purpose of this paper is to assess farmers’ willingness to participate and pay for weather-based index insurance in the Upper East Region of Ghana, and what factors influence the participation and purchase of crop insurance schemes.

A survey of 200 farmers in the region was carried out in 2018 to measure demographic information, farm characteristics, risks and risk-management practices and attitudes to crop insurance programs. The survey also captured maximum willingness to pay (WTP) for crop insurance. The double-bounded contingent valuation technique was used to estimate the WTP for crop insurance and the variables that affected WTP.

Farmers, in general, had an indifferent attitude to crop insurance in the region, but were willing to participate in the crop insurance programme, and were willing to pay between 7.5 and 12.5 per cent of the cost of growing maize as a premium for crop insurance. Demographic and economic variables did not impact WTP, but attitude towards crop insurance, farm diversification and frequency of drought negatively impacted on the WTP for crop insurance.

Education programs could be undertaken to improve the attitude and understanding towards crop insurance, as some farmers perceived the programme as not trustworthy, and others did not truly understand the operation of the programme.

Drought can have a significant impact on household welfare, particularly in food insecure countries or regions. Crop insurance can provide a method of securing income for farmers allowing them to purchase food rather than other choices, such as removing children from education to reduce household expenses, improving the long-term welfare of the farm household.

This paper considers willingness to participate and WTP for a crop insurance programme in Ghana, it is one of a small number of papers that consider attitude to, and willingness to participate and WTP for crop insurance in developing countries. The value of the research is the expanded understanding of farmer attitude to crop insurance and their lack of knowledge of crop insurance operations.

Rent seeking is endemic to the process through which any policy or regulatory initiative is developed in the USA. The purpose of this paper is to show how farm and other interest groups have formed coalitions to benefit themselves at the expense of the federal government by examining the legislative history of the federal crop insurance program.

The federal crop insurance legislation and the way in which the USDA Risk Management Agency manages federal crop insurance program are replete with complex and subtle policy initiatives. Using a new theoretical framework, the study examines how, since 1980, three major legislative initiatives – the 1980 Federal Crop Insurance Act, the 1994 Crop Insurance Reform Act and the 2000 Agricultural Risk Protection Act – were designed to jointly benefit farm interest groups and the agricultural insurance industry, largely through increases in government subsidies.

Each of the three legislative initiatives examined here included provisions that, when considered individually, benefitted farmers and adversely affected the insurance industry, and vice versa. However, the joint effects of the multiple adjustments included in each of those legislative initiatives generated net benefits for both sets of interest groups. The evidence, therefore, indicates that coalitions formed between the farm and insurance lobbies to obtain policy changes that, when aggregated, benefited both groups, as well as banks with agricultural lending portfolios. However, those benefits came at an increasingly substantial cost to taxpayers through federal government subsidies.

This is the first analysis of the US federal crop insurance program to examine the issue of coalition formation.