Determinants of Smallholder Farmers' Awareness of Crop Insurance in Kedah, Malaysia

Abstract

Agriculture is a major source of income for humans and has become an agro-food commodity. However, this industry is vulnerable to a wide range of dangers, including climate change, natural disasters, illnesses, and pests. Crop insurance is not a new concept in advanced economies since it has been recognized as an efficient instrument for mitigating agricultural risks and encouraging farmers to employ modern technology and innovation. This research investigates the determinants of smallholder farmers' awareness of crop insurance in the agricultural landscape of Kedah, Malaysia. Therefore, this study examines the relationship between knowledge, risk attitude and farm size on the farmers' awareness of crop insurance. The study, based on a sample of 100 farmers, utilizes a non-probability sampling technique to collect data through structured questionnaires. The research employs reliability analysis, correlation analysis, and regression analysis to evaluate the raw data and uncover the factors influencing farmers' awareness of crop insurance. The study conclusion shows a strong correlation between farmers' knowledge levels and farm size as important indicators of crop insurance awareness. The analysis emphasizes how crucial it is to increase farmers' understanding through focused educational programs and customized awareness campaigns that take farm size dynamics into account. Policymakers and agricultural extension services can enable smallholder farmers to make well-informed decisions about using crop insurance as a strategy to manage agricultural risks and guarantee financial stability by making information and resources easily accessible.