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1 – 2 of 2Bhishma R. Dahal, Sudip Adhikari and Aditya R. Khanal
In Nepal, crop insurance is at initial phase. However, since its implementation seven years ago, the adoption rate has been fairly low even with the government's lucrative subsidy…
Abstract
Purpose
In Nepal, crop insurance is at initial phase. However, since its implementation seven years ago, the adoption rate has been fairly low even with the government's lucrative subsidy on premium. There have been very limited studies on specifics of insurance for different crops, and farmer's acceptability on insurance. This study examines WTP for tree-based insurance, a potential insurance scheme on fruit crops in hilly areas of Nepal.
Design/methodology/approach
The authors used a contingent valuation method to estimate farmer's willingness to pay (WTP) premium for insurance. They used a double-bounded dichotomous choice (DBDC) framework to elicit WTP and an interval regression method to estimate the WTP model.
Findings
The authors found that the farmers revealed WTP for tree-based insurance is three times higher than the premium they would pay under government's current subsidy plans of insurance. The authors’ result from interval regression also suggests that the factors such as farm size, farmer's adverse experience about invasive pest and weather, awareness of crop insurance, farming experience, and family involvement in agriculture significantly influence farmers' WTP.
Research limitations/implications
A distinct modality of insurance, like tree-based insurance for fruit crops in mid and high hill areas, may enhance the adoption rate rather than a broad area-based plan generalized for all crops.
Originality/value
Only a few studies have examined specifics of insurance in fruit crop insurance in developing countries. The authors’ estimated WTP factors influencing WTP on citrus fruit-crop insurance in Nepal indicates that there is a scope for extending this insurance program. However, the authors also found that there is a gap in understanding of crop insurance and have limited awareness on the government's subsidy programs among farmers.
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Sudip Adhikari and Aditya R. Khanal
The purpose of this paper is to present theoretical synopsis of risk balancing hypothesis (RBH) and estimate empirical models examining debt, savings and debt-to-equity use…
Abstract
Purpose
The purpose of this paper is to present theoretical synopsis of risk balancing hypothesis (RBH) and estimate empirical models examining debt, savings and debt-to-equity use decisions of small US farms.
Design/methodology/approach
The authors use primary survey data from Tennessee and generalized linear models (GLMs).
Findings
The study’s findings suggest that the perceived higher business risk (BR) significantly increases the extent of debt use, savings use and debt-to-equity of small farmers. Moreover, results indicate that factors such as age and education of the operator, family involvement, incomes, land acreage, adoption of alternative on-farm enterprises and farmers' continuation plan significantly influence the financing decisions of small farm operations.
Originality/value
The authors investigated an essential empirical question examining the risk balancing behavior of small US farm operations. While risk balancing has been a theme of several studies, none of the previous studies have specifically looked at the behavior in the context of small US farms. The theoretical synopsis and empirical findings contribute to the literature of risk balancing, debt use and savings use decisions and the policy discussions on farm financial and support strategies.
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