EVALUATION OF THE SOCIAL ACCEPTANCE FOR AN ALTERNATIVE CROP INSURANCE SCHEME FOR PADDY

Abstract

Crop insurance schemes are important in increasing the agricultural production as most of the subsistence farmers in the developing countries are risk-aversed. However, according to the records of the Agrarian and Agricultural Insurance Board, the present paddy insurance scheme has not attracted majority of the paddy farmers. With this background, a study was undertaken to investigate the weaknesses of present paddy insurance scheme and the factors affecting the enrollment. An alternative premium scheme was also developed and the farmers’ response on it was assessed. The estimation of new premium rate was done using the secondary data available at the Department of Agriculture, based on Olivier’s (1999) approach. A field survey was conducted to investigate the problems of the present scheme and to assess the social acceptance of the alternative scheme. The study revealed that majority of the paddy farmers have not enrolled in the present scheme mainly due to administrative inefficiency, low indemnity payments and lack of awareness. The proposed scheme appears to be more attractive to the most of the rain fed and minor irrigated farmers but not to the major-irrigated farmers. Farmer’s age and farming income were significantly negatively associated with the present enrollment while willingness to join the new scheme was appeared to be high with full- time farmers having more lowland areas. A number of meaningful policy recommendations that helps to improve the livelihood of the rural farmers were derived from the study.

Keywords: Paddy, Insurance, Premium, Indemnity, AAIB

For full Paper: fmscresearch@sjp.ac.lk