Farmers’ Risk Preferences and Agricultural Weather Index Insurance Uptake in Rural China

Jia, Jianjun; Wang, Wenyu; Wang, Xiaomin

doi:10.1007/s13753-016-0108-3

Cited by 56 publications

(41 citation statements)

References 46 publications

(50 reference statements)

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“…If they participated in agriculture insurance, to what extent, they could avoid the loss brought about by climate change. But, agricultural insurance policy has been considered as one of the most useful and important risk mitigation means to decrease farmer's economic losses (Foudi and Erdlenbruch 2012;Panda et al 2013;Falco et al 2014;Jin et al 2016).…”

Section: Discussionmentioning

confidence: 99%

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Climate change and Chinese farmers: Perceptions and determinants of adaptive strategies

Zhai

Song

Qin

et al. 2018

Journal of Integrative Agriculture

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Farmers' perceptions, beliefs, adaptive strategies, and barriers regarding climate change are critical to promoting sustainable ecosystems and societal stability. This paper is based on an extensive survey of 1 500 farmers and their households in Henan Province in China during 2013-2014. Henan is the largest agricultural province in China with over 51 million farmers. The survey results showed that approximately 57% of the respondents perceived the direct impact of climate change during the past 10 years, with 70.3% believing that climate change posed a risk to their livelihood. Not surprisingly, most farmers reported that they have adopted new measures to mitigate the negative impacts of climate change. The main barriers hindering farmers' adopting adaptation measures were lack of funds and timely information. A multinomial logit model revealed that land ownership, knowledge of crop variety and the causes of climate change, as well as the belief of climate change, were all positively related to the likelihood of employing adaptive strategies. Moreover, the percentage of households engaging in agriculture activity, and years of engaging in farming were both negatively correlated with famer's likelihood of adopting adaptation strategies. More importantly, farmers with high incomes were less likely to adopt adaptive strategies and more willing to engage in other business activities. In conclusion, it is important to communicate climate change related information and government policies in rural areas, promote farmer associations and other educational outreach efforts to assist Chinese farmers to deal with climate change.

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Section: Discussionmentioning

confidence: 99%

“…Recently, weather index insurance based on the observed value of a specified meteorological station was formed and preferred by local farmers and insurers (Jin et al 2016). It was relatively new insurance product and has not been widely implemented in China.…”

Section: Discussionmentioning

confidence: 99%

Climate change and Chinese farmers: Perceptions and determinants of adaptive strategies

Zhai

Song

Qin

et al. 2018

Journal of Integrative Agriculture

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“…reduce farmers' risk-aversion). To date, empirical studies have not explored this possibility as they have focused on the effects that farmers' risk preferences have on the uptake of WICI as demonstrated in Giné et al (2008); Cole et al (2013); Hill et al (2013); Karlan et al (2014); Jin et al (2016). However, the implicit assumption that farmers' risk preferences are exogenous and cannot be changed may be excessive (Melesse and Cecchi, 2017).…”

Section: Introductionmentioning

confidence: 99%

Impact of formal climate risk transfer mechanisms on risk-aversion: Empirical evidence from rural Ethiopia

2020

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This study examines the effect of smallholder farmers' access to a formal climate risk transfer mechanism on their risk preferences. Survey and experimental data were collected from smallholder farmers that have access to weather index-based crop insurance (WICI) in Ethiopia. We use an endogenous switching (ESP) model to address self-selection and simultaneity bias. Results from the ESP model show that farmers who purchased WICI are less likely to be riskaverse compared with non-purchaser farmers. Similarly, non-purchasers would have attained a significant reduction in their risk-aversion if they had taken up the insurance product. We also find that WICI has a positive and statistically significant effect on farmers' real-life risk-taking behavior as exemplified by mineral fertilizer use. The implication of our findings is that formal climate risk transfer mechanisms can positively influence households' economic decisions and outcomes, through reducing risk aversion. Therefore, they can possibly contribute to poverty alleviation and economic development within agrarian economies that are exposed to recurrent and severe climate shocks. JEL-Codes: C910, D030, I380, N270.

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“…First, agricultural insurance is a new business in Indonesia. Second, agricultural insurance is a high-risk business (Jin et al 2016). Third, many general insurance companies are just waiting for the results of the old players in the industry and do not do research and development due to the high cost that will be incurred to perform these activities.…”

Section: Discussionmentioning

confidence: 99%

Strategy to Develop Rice Farm Business Insurance in PT Asuransi Jasa Indonesia

Jatmiko

Daryanto

Hasbullah

2017

ijbe

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Agricultural sector has very significant roles in Indonesian economy, some of which are as the contributor of the second highest PDB and the biggest labor absorber with the contribution of 13.6% and 32% respectively. Even though, it is the biggest labor absorber,agricultural business is not interesting to the community nowadays. This is because this business has a quite high risk to fail to harvest. This research aimed to analyze the external and internal factors affecting the development of Rice Farm Business Insurance (AUTP), to know the position of the company in carrying out the AUTP, and to formulate the strategy to develop AUTP in PT Asuransi Jasa Indonesia (Jasindo). This research used descriptive method through case study with the analysis equipment, like Five Forces Porter, IFE/EFE Matrix, IE Matrix, SWOT, and QSPM. The results showed that there were several strategic factors influencing the implementation of AUTP, i.e. a wide market opportunity. The position of the company in the implementation of AUTP was in the position of hold and maintain with the recommended strategy, of market penetration and product development. In this research, eight alternative strategies were obtained with the with the highest priority was to expand the distribution channel network. Keywords

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Farmers’ Risk Preferences and Agricultural Weather Index Insurance Uptake in Rural China

Cited by 56 publications

References 46 publications

Climate change and Chinese farmers: Perceptions and determinants of adaptive strategies

Climate change and Chinese farmers: Perceptions and determinants of adaptive strategies

Impact of formal climate risk transfer mechanisms on risk-aversion: Empirical evidence from rural Ethiopia

Strategy to Develop Rice Farm Business Insurance in PT Asuransi Jasa Indonesia

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