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Agricultural Insurance in Developing and Emerging Economics: Demand, Impacts, and Future Prospects

Paper Session

Saturday, Jan. 5, 2019 2:30 PM - 4:30 PM

Hilton Atlanta, 401
Hosted By: Agricultural and Applied Economics Association
  • Chair: Awudu Abdulai, University of Kiel

Crop Insurance and Food Security in India: Evidence from Rice Farmers in Eastern India

Thiagu Ranganathan
,
Indian Institute of Management Nagpur
Ashok K. Mishra
,
Arizona State University

Abstract

The paper explores the spread of crop insurance (CI) in India and analyzes the association of factors affecting the demand for crop insurance. Additionally, using large farm-level survey data from Eastern India, the study assesses CI’s impact on rice yields of smallholder rice producers. The study tests for robustness of the findings after controlling for other covariates and endogeneity. Results indicate CI has a positive and significant impact on rice yields. In particular, the ATET and ATEUT effect of CI on rice yields is about 47%. However, CI’s impact on rice yields is heterogeneous among farm sizes of smallholders. Participation in CI increased rice yields of large farms by 49% but increased rice yields of small farms by only 16%.

Production Risks, Liquidity Constraints and Participation in Crop Insurance Programs in Ghana

Renan Goetz
,
University of Girona
Awudu Abdulai
,
University of Kiel
Victor Owusu
,
Kwame Nkrumah University of Science and Technology

Abstract

This paper analyzes smallholder farmers’ decisions to participate in crop insurance programs, using cross-sectional data from cocoa farmers in the Ashanti, Brong-Ahafo and Western Regions of Ghana. Given the significance of output uncertainty and imperfect capital and insurance markets, we develop a theoretical framework to show how risk preferences and liquidity constraints influence farmers’ crop insurance participation decisions. We use a stated preference approach to obtain information on farmers’ willingness to participate in crop insurance programs, and a discrete choice model to examine the factors that influence their participation decisions. We find that risk preferences and liquidity constraints influence farmers’ willingness to participate in crop insurance programs. The results also show that the probability of participating in crop insurance programs is higher for males, the more educated, and those who trust others. The levels of fertilizer and pesticide expenditure and access to credit are also found to significantly influence the decision to adopt the programs.

Micro-Analysis on the Evaluation of the Impacts of Natural Disasters on Agriculture: Implications for Crop Insurance Programs in Taiwan

Hung Hao Chang
,
National Taiwan University

Abstract

Agriculture in Taiwan is vulnerable to natural disaster shocks due to its geographical location in a semi-tropical zone. The Agricultural Disaster Relief Program (ADRP) is the government-sponsored program and it is the only program in Taiwan to provide cash compensation to farmers for their crop and cultivated facility loss as a result of natural disasters. Taiwanese government is now trying to implement market-based crop insurance program to replace the ADRP. The objective of this paper is to evaluate the impacts of agricultural disasters on crop production in Taiwan. We use a repeated large-scaled population-based farm household dataset in empirical analysis. The estimates on hand can then be used as the basis to calculate the optimal premium for the incoming crop insurance program.
Discussant(s)
Diego Arias Carballo
,
World Bank
JEL Classifications
  • F0 - General