IDEAS home Printed from https://ideas.repec.org/a/ags/ifaamr/316289.html
   My bibliography  Save this article

Factors affecting farmers' willingness to adopt crop insurance to manage disaster risk: evidence from Bangladesh

Author

Listed:
  • Islam, Md Din II
  • Rahman, Airin
  • Sarker, M. Sazzadur Rahman
  • Luo, Jianchao
  • Liang, Hu

Abstract

Climate change and climate-related disasters have had a major impact on agriculture and agricultural livelihoods in Bangladesh, threatening the food security of the entire nation. Non-structural measures such as crop insurance have been recommended as risk management tools for farmers but have not been implemented because of a lack of supporting policies, expertise, and lack of information about farmers’ willingness to adopt such strategies. This study aims to fill that research gap by exploring the factors influencing agricultural producers to purchase crop insurance. Primary data were collected from three districts (Mymensingh, Barisal, and Comilla) that are prone to flooding. A multinomial logit model was adopted to investigate the relationships among dependent and explanatory variables. The results indicate that age, loan size, distance from the major river, farming experience, farming type, and risk attitude affect farmers’ willingness to pay for crop insurance. Government subsidies and increased awareness of the benefits of crop insurance could improve the outlook for the agricultural sector and help medium and subsistence farmers maintain their livelihoods. The results also provide valuable guidance for local, national, and international stakeholders.

Suggested Citation

  • Islam, Md Din II & Rahman, Airin & Sarker, M. Sazzadur Rahman & Luo, Jianchao & Liang, Hu, 2021. "Factors affecting farmers' willingness to adopt crop insurance to manage disaster risk: evidence from Bangladesh," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(3), April.
    • Handle: RePEc:ags:ifaamr:316289
    DOI: 10.22004/ag.econ.316289
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/316289/files/ifamr2021.0016.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.316289?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Botzen, W.J.W. & Aerts, J.C.J.H. & van den Bergh, J.C.J.M., 2009. "Willingness of homeowners to mitigate climate risk through insurance," Ecological Economics, Elsevier, vol. 68(8-9), pages 2265-2277, June.
    2. Jamie Sanderson & Sardar M. N. Islam, 2007. "Climate Change and Economic Development," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59012-0, December.
    3. Xiaojuan Yang & Yuan Liu & Wei Bai & Buchun Liu, 2015. "Evaluation of the crop insurance management for soybean risk of natural disasters in Jilin Province, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 76(1), pages 587-599, March.
    4. Kumar, D. Suresh & Barah, B.C. & Ranganathan, C.R. & Venkatram, R. & Gurunathan, S. & Thirumoorthy, S., 2011. "An Analysis of Farmers’ Perception and Awareness towards Crop Insurance as a Tool for Risk Management in Tamil Nadu," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 24(1), June.
    5. Torkamani, Javad, 2005. "Using a whole-farm modelling approach to assess prospective technologies under uncertainty," Agricultural Systems, Elsevier, vol. 85(2), pages 138-154, August.
    6. Perry, Janet E. & Mishra, Ashok K., 1999. "Forward Contracting Of Inputs: A Farm-Level Analysis," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 17(2), pages 1-15.
    7. Vandeveer, Monte L., 2001. "Demand for area crop insurance among litchi producers in northern Vietnam," Agricultural Economics, Blackwell, vol. 26(2), pages 173-184, November.
    8. Jim Roumasset, 1999. "Hardeker, J. Brian, Ruud B.M. Huirne, and Jock R. Anderson. Coping With Risk in Agriculture. Oxon UK and New York: CAB International, 1997, price unknown," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 749-751.
    9. K.S. , A. & Khan, T. & Kishore, A., 2018. "Willingness to pay for Weather Based Crop Insurance in Punjab," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277516, International Association of Agricultural Economists.
    10. Wencong Lu & Abdul Latif & Raza Ullah, 2017. "Simultaneous adoption of contract farming and off-farm diversification for managing agricultural risks: the case of flue-cured Virginia tobacco in Pakistan," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 86(3), pages 1347-1361, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sun, Ji-Le & Tao, Ran & Wang, Jiao & Wang, Yi-Fei & Li, Jia-Yi, 2024. "Do farmers always choose agricultural insurance against climate change risks?," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 617-628.
    2. Datta, Pritha & Behera, Bhagirath & Timsina, Jagadish & Rahut, Dil Bahadur, 2024. "Achieving sustainable development through agriculture-forestry-livestock nexus in Bangladesh: Synergies and trade-offs," Agricultural Systems, Elsevier, vol. 215(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fahad, Shah & Wang, Jing & Hu, Guangyin & Wang, Hui & Yang, Xiaoying & Shah, Ashfaq Ahmad & Huong, Nguyen Thi Lan & Bilal, Arshad, 2018. "Empirical analysis of factors influencing farmers crop insurance decisions in Pakistan: Evidence from Khyber Pakhtunkhwa province," Land Use Policy, Elsevier, vol. 75(C), pages 459-467.
    2. Richard G. Newell & William A. Pizer & Daniel Raimi, 2014. "Carbon Markets: Past, Present, and Future," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 191-215, October.
    3. van Vuuren, Detlef P. & Hoogwijk, Monique & Barker, Terry & Riahi, Keywan & Boeters, Stefan & Chateau, Jean & Scrieciu, Serban & van Vliet, Jasper & Masui, Toshihiko & Blok, Kornelis & Blomen, Eliane , 2009. "Comparison of top-down and bottom-up estimates of sectoral and regional greenhouse gas emission reduction potentials," Energy Policy, Elsevier, vol. 37(12), pages 5125-5139, December.
    4. Falk, Martin & Vanat, Laurent, 2016. "Gains from investments in snowmaking facilities," Ecological Economics, Elsevier, vol. 130(C), pages 339-349.
    5. Yuqiang Gao & Yongkang Shu & Hongjie Cao & Shuting Zhou & Shaobin Shi, 2021. "Fiscal Policy Dilemma in Resolving Agricultural Risks: Evidence from China’s Agricultural Insurance Subsidy Pilot," IJERPH, MDPI, vol. 18(14), pages 1-11, July.
    6. Frank W. Geels & Jonatan Pinkse & Dimitri Zenghelis, 2021. "Productivity opportunities and risks in a transformative,low-carbon and digital age," Working Papers 009, The Productivity Institute.
    7. Michalis Diakakis & Dimitris G. Damigos & Andreas Kallioras, 2020. "Identification of Patterns and Influential Factors on Civil Protection Personnel Opinions and Views on Different Aspects of Flood Risk Management: The Case of Greece," Sustainability, MDPI, vol. 12(14), pages 1-20, July.
    8. Leonard Nurse & Rawleston Moore, 2007. "Critical considerations for future action during the second commitment period: A small islands’ perspective," Natural Resources Forum, Blackwell Publishing, vol. 31(2), pages 102-110, May.
    9. Dale Rothman & Patricia Romero-Lankao & Vanessa Schweizer & Beth Bee, 2014. "Challenges to adaptation: a fundamental concept for the shared socio-economic pathways and beyond," Climatic Change, Springer, vol. 122(3), pages 495-507, February.
    10. Ekholm, Tommi & Soimakallio, Sampo & Moltmann, Sara & Höhne, Niklas & Syri, Sanna & Savolainen, Ilkka, 2010. "Effort sharing in ambitious, global climate change mitigation scenarios," Energy Policy, Elsevier, vol. 38(4), pages 1797-1810, April.
    11. Morgan Bazilian & Patrick Nussbaumer & Hans-Holger Rogner & Abeeku Brew-Hammond & Vivien Foster & Shonali Pachauri & Eric Williams & Mark Howells & Philippe Niyongabo & Lawrence Musaba & Brian Ó Galla, 2011. "Energy Access Scenarios to 2030 for the Power Sector in Sub-Saharan Africa," Working Papers 2011.68, Fondazione Eni Enrico Mattei.
    12. Strachan, Neil & Pye, Steve & Kannan, Ramachandran, 2009. "The iterative contribution and relevance of modelling to UK energy policy," Energy Policy, Elsevier, vol. 37(3), pages 850-860, March.
    13. Zarsky, Lyuba, 2010. "Climate-Resilient Industrial Development Paths: Design Principles and Alternative Models," Working Papers 179080, Tufts University, Global Development and Environment Institute.
    14. Qian, Yuan & Scherer, Laura & Tukker, Arnold & Behrens, Paul, 2020. "China's potential SO2 emissions from coal by 2050," Energy Policy, Elsevier, vol. 147(C).
    15. Ribas, Aline & Lucena, André F.P. & Schaeffer, Roberto, 2017. "Bridging the energy divide and securing higher collective well-being in a climate-constrained world," Energy Policy, Elsevier, vol. 108(C), pages 435-450.
    16. Adnan, Nadia & Nordin, Shahrina Md & Anwar, Abdullah, 2020. "Transition pathways for Malaysian paddy farmers to sustainable agricultural practices: An integrated exhibiting tactics to adopt Green fertilizer," Land Use Policy, Elsevier, vol. 90(C).
    17. van Vuuren, Detlef P. & Stehfest, Elke & den Elzen, Michel G.J. & van Vliet, Jasper & Isaac, Morna, 2010. "Exploring IMAGE model scenarios that keep greenhouse gas radiative forcing below 3 W/m2 in 2100," Energy Economics, Elsevier, vol. 32(5), pages 1105-1120, September.
    18. Emmanuel, Zachariah & Anga, Rosemary A. & Isa, Charity G., 2019. "The Determinants of Micro, Small and Medium Enterprises’ (MSMEs) Performance in Nigeria: Evidence from Business Enterprise Survey," MPRA Paper 98874, University Library of Munich, Germany.
    19. Timo Goeschl & Shunsuke Managi, 2019. "Public in-Kind Relief and Private Self-Insurance," Economics of Disasters and Climate Change, Springer, vol. 3(1), pages 3-21, April.
    20. Fahad, Shah & Jing, Wang, 2018. "Evaluation of Pakistani farmers’ willingness to pay for crop insurance using contingent valuation method: The case of Khyber Pakhtunkhwa province," Land Use Policy, Elsevier, vol. 72(C), pages 570-577.

    More about this item

    Keywords

    Agribusiness; Risk and Uncertainty;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifaamr:316289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifamaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.