An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges

Krishna Reddy Kakumanu, Kuppannan Palanisami, Kotapati Gurava Reddy, Udaya Sekhar Nagothu, Kota Tirupataiah, Stefanos Xenarios, Babar Ashok

Research output: Chapter in Book/Report/Conference proceedingChapter (peer-reviewed)

9 Downloads (Pure)

Abstract

Farmers are vulnerable to substantial weather risks in many parts of the country. In recent years, weather-based crop insurance has been promoted in India for rain-fed crops to provide insurance against risks and losses in crop yields resulting from adverse weather. Farmers, in general, are not aware of the details of weather-based crop insurance policies and the premium calculations. This study focuses on farmers’ preferences towards the weather insurance of paddy crop, one of the major irrigated crops in India and highly vulnerable to extreme weather. We analyse the mean willingness to pay for weather-based crop insurance using the double bounded dichotomous model of contingent valuation method. Farmers’ willingness to pay was about 2.5 % of gross income with the condition of timely payout for crop losses, creating awareness of the compensation packages and simple documentation. The insurance premium can also be referred to as a risk-adjusted management input in agricultural
production.
Original languageEnglish
Title of host publicationThe challenges of index-based insurance for food security in developing countries
EditorsFrançois Kayitakire, René Gommes
PublisherEuropean Commission, Joint Research Centre Institute for Environment and Sustainability
Chapter19
Pages137-145
ISBN (Print)978-92-79-27783-2
DOIs
Publication statusPublished - 2013

Fingerprint

willingness to pay
insurance
weather
farmers
India
crop insurance
crops
contingent valuation
crop losses
paddies
crop yield
income
rain

Keywords

  • weather-based crop insurance scheme
  • agriculture insurance
  • double bounded dichotomous model
  • willingness to pay

Cite this

Kakumanu, K. R., Palanisami, K., Gurava Reddy, K., Nagothu, U. S., Tirupataiah, K., Xenarios, S., & Ashok, B. (2013). An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges. In F. Kayitakire, & R. Gommes (Eds.), The challenges of index-based insurance for food security in developing countries (pp. 137-145). European Commission, Joint Research Centre Institute for Environment and Sustainability. https://doi.org/doi:10.2788/713

An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges. / Kakumanu, Krishna Reddy ; Palanisami, Kuppannan ; Gurava Reddy, Kotapati ; Nagothu, Udaya Sekhar ; Tirupataiah, Kota ; Xenarios, Stefanos; Ashok, Babar .

The challenges of index-based insurance for food security in developing countries. ed. / François Kayitakire; René Gommes. European Commission, Joint Research Centre Institute for Environment and Sustainability, 2013. p. 137-145.

Research output: Chapter in Book/Report/Conference proceedingChapter (peer-reviewed)

Kakumanu, KR, Palanisami, K, Gurava Reddy, K, Nagothu, US, Tirupataiah, K, Xenarios, S & Ashok, B 2013, An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges. in F Kayitakire & R Gommes (eds), The challenges of index-based insurance for food security in developing countries. European Commission, Joint Research Centre Institute for Environment and Sustainability, pp. 137-145. https://doi.org/doi:10.2788/713
Kakumanu KR, Palanisami K, Gurava Reddy K, Nagothu US, Tirupataiah K, Xenarios S et al. An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges. In Kayitakire F, Gommes R, editors, The challenges of index-based insurance for food security in developing countries. European Commission, Joint Research Centre Institute for Environment and Sustainability. 2013. p. 137-145 https://doi.org/doi:10.2788/713
Kakumanu, Krishna Reddy ; Palanisami, Kuppannan ; Gurava Reddy, Kotapati ; Nagothu, Udaya Sekhar ; Tirupataiah, Kota ; Xenarios, Stefanos ; Ashok, Babar . / An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges. The challenges of index-based insurance for food security in developing countries. editor / François Kayitakire ; René Gommes. European Commission, Joint Research Centre Institute for Environment and Sustainability, 2013. pp. 137-145
@inbook{bfbecbf47a924050bb3890525c8129f1,
title = "An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges",
abstract = "Farmers are vulnerable to substantial weather risks in many parts of the country. In recent years, weather-based crop insurance has been promoted in India for rain-fed crops to provide insurance against risks and losses in crop yields resulting from adverse weather. Farmers, in general, are not aware of the details of weather-based crop insurance policies and the premium calculations. This study focuses on farmers’ preferences towards the weather insurance of paddy crop, one of the major irrigated crops in India and highly vulnerable to extreme weather. We analyse the mean willingness to pay for weather-based crop insurance using the double bounded dichotomous model of contingent valuation method. Farmers’ willingness to pay was about 2.5 {\%} of gross income with the condition of timely payout for crop losses, creating awareness of the compensation packages and simple documentation. The insurance premium can also be referred to as a risk-adjusted management input in agriculturalproduction.",
keywords = "weather-based crop insurance scheme, agriculture insurance, double bounded dichotomous model, willingness to pay",
author = "Kakumanu, {Krishna Reddy} and Kuppannan Palanisami and {Gurava Reddy}, Kotapati and Nagothu, {Udaya Sekhar} and Kota Tirupataiah and Stefanos Xenarios and Babar Ashok",
year = "2013",
doi = "doi:10.2788/713",
language = "English",
isbn = "978-92-79-27783-2",
pages = "137--145",
editor = "Kayitakire, {Fran{\cc}ois } and Gommes, {Ren{\'e} }",
booktitle = "The challenges of index-based insurance for food security in developing countries",
publisher = "European Commission, Joint Research Centre Institute for Environment and Sustainability",

}

TY - CHAP

T1 - An insight of farmers’ willingness to pay for insurance premium in South India: Hindrances and Challenges

AU - Kakumanu, Krishna Reddy

AU - Palanisami, Kuppannan

AU - Gurava Reddy, Kotapati

AU - Nagothu, Udaya Sekhar

AU - Tirupataiah, Kota

AU - Xenarios, Stefanos

AU - Ashok, Babar

PY - 2013

Y1 - 2013

N2 - Farmers are vulnerable to substantial weather risks in many parts of the country. In recent years, weather-based crop insurance has been promoted in India for rain-fed crops to provide insurance against risks and losses in crop yields resulting from adverse weather. Farmers, in general, are not aware of the details of weather-based crop insurance policies and the premium calculations. This study focuses on farmers’ preferences towards the weather insurance of paddy crop, one of the major irrigated crops in India and highly vulnerable to extreme weather. We analyse the mean willingness to pay for weather-based crop insurance using the double bounded dichotomous model of contingent valuation method. Farmers’ willingness to pay was about 2.5 % of gross income with the condition of timely payout for crop losses, creating awareness of the compensation packages and simple documentation. The insurance premium can also be referred to as a risk-adjusted management input in agriculturalproduction.

AB - Farmers are vulnerable to substantial weather risks in many parts of the country. In recent years, weather-based crop insurance has been promoted in India for rain-fed crops to provide insurance against risks and losses in crop yields resulting from adverse weather. Farmers, in general, are not aware of the details of weather-based crop insurance policies and the premium calculations. This study focuses on farmers’ preferences towards the weather insurance of paddy crop, one of the major irrigated crops in India and highly vulnerable to extreme weather. We analyse the mean willingness to pay for weather-based crop insurance using the double bounded dichotomous model of contingent valuation method. Farmers’ willingness to pay was about 2.5 % of gross income with the condition of timely payout for crop losses, creating awareness of the compensation packages and simple documentation. The insurance premium can also be referred to as a risk-adjusted management input in agriculturalproduction.

KW - weather-based crop insurance scheme

KW - agriculture insurance

KW - double bounded dichotomous model

KW - willingness to pay

UR - https://publications.europa.eu/en/publication-detail/-/publication/d93219f2-252e-48a9-b5de-38d65de16f9a/language-en

U2 - doi:10.2788/713

DO - doi:10.2788/713

M3 - Chapter (peer-reviewed)

SN - 978-92-79-27783-2

SP - 137

EP - 145

BT - The challenges of index-based insurance for food security in developing countries

A2 - Kayitakire, François

A2 - Gommes, René

PB - European Commission, Joint Research Centre Institute for Environment and Sustainability

ER -