Preferences for crop insurance when farmers are diversified

Abstract

The government intends to rely on an insurance‐based solution to yield risk. Therefore, it is important to identify which characteristics most affect a grower's decision regarding whether or not to use crop insurance. This case study uses California cross‐sectional survey data to directly compare the relative effects of three types of characteristics that are expected to influence insurance preferences. In general, results from the model estimated indicate that preferences for crop insurance are a function of the commodities produced and the risk environment faced by individual growers. © 1996 John Wiley & Sons, Inc.

Factors Influencing Adoption of Livestock Insurance by Commercial Dairy Farmers in Three Zobatat of Eritrea

“…Jarvie and Nieuwoudt (1988) reported that use of other strategies, such as on-farm diversification and generating offfarm income, may reduce the use of insurance as a means of risk management. Blank and McDonald (1996) reported that more diversification is practised in the absence of insurance.…”

“…In a situation where one of the two tools (insurance or farm diversification) is not available, the other is used, but when both insurance and farm diversification are available, both could be considered by risk-averse farmers (Blank and McDonald, 1996). EXP is expected to have a negative impact on the likelihood of livestock insurance adoption because as farmers get more farming experience, they become more aware of various risk management strategies, which lowers the probability of adopting insurance.…”

Adoption of Diversification for Risk Management in Vegetable Cultivation

“…Studies have analyzed factors affecting adoption of diversification for risk management in agriculture (Abadi-Ghadim et al, 2005;Blank, 1996;Boehlje and Lins, 1998;Ibitayo, 2006;Jackson et al, 2009;Pope and Prescott, 1980;Tibig and Lansigan, 2007;Velandia et al, 2009). Age, education, income, landholdings, ability to irrigate, participation in lease-in market, use of farm credit, and marketable surplus were important factors affecting adoption of diversification for risk management in agriculture.…”

Determinants of insurance adoption among Bulgarian farmers

“…The most high-risk farms in terms of weather exposure should be more likely to take out insurance. Usual proxies for climate risk exposure are meteorological data such as mean temperature, cumulated precipitation, hours of sun, days of frost, days of strong wind and number of storm events (Blank and McDonald, 1996;Van Asseldonk et al, 2002). The meteorological data used here are: the number of days of precipitation, taken as proxy for rainfall and drought risk (y0710_dayprecip), number of days of thunderstorm, used as proxy for hail risk (y0710_daythunderstorms) and number of days of snow, a proxy for frost risk (y0710_daysnow).…”

“…More liquidity constrained farmers are expected to insure more (Enjolras and Sentis, 2011). Greater debt-to-asset ratios indicate greater financial risk and a stronger demand for more comprehensive insurance products (Blank and McDonald, 1996;Van Asseldonk et al, 2002;Mishra and Goodwin, 2003). We use a dummy variable indicating whether the farm has on-going credits, as an indicator of the debt constraint of the farm (credit_D).…”