Risk mitigation of climate change impacts on rice farming through crop insurance: an analysis of farmer’s willingness to participate (a case study in Karawang Regency, Indonesia)

Abstract

Rice farming is still dominant in supplying food needs in Indonesia, so drought or flood will impact on food security. Rice farmers as the main actors are heavily impacted by climate change risks through the increasing difficulties of farming development. Therefore, there should be a protection program for farmers from the negative impacts of climate change. Agricultural insurance is one form of adaptation to the impact of climate change that is potentially developed in Indonesia and began to be initiated since 2015 by the Indonesian government through the policy, called Asuransi Usaha Tani Padi (AUTP) in Indonesian. This study aims to determine the factors that affect farmers’ participation in the insurance program, by analyzing the farmer’s willingness to pay (WTP) using logistic regression. Data were collected from Karawang Regency, West Java which contributes to the national rice demand of 865,000 tons per year. This study found that significant factors influencing farmer’s decision to participate in the crop insurance program were farm size, land status, farmer’s income, and expenditure, also the value of WTP Bid.