Agricultural Insurance Research Articles

Agricultural Insurance Premium Determination Model for Risk Mitigation Based on Rainfall Index: Systematic Literature Review

Rainfall is significantly essential in the agricultural sector to increase productivity. However, rainfall instability serves as a potential source of risk, causing crop failure and negatively impacting the welfare of farmers. To mitigate this risk, rainfall index-based agricultural insurance offers financial protection to farmers. There is no information on how to set a reasonable premium in index-based agricultural insurance. Therefore, this research aimed to systematically explore a model for determining a rainfall index-based agricultural insurance premium, focusing on the methods used and their effectiveness in mitigating the risk of harvest failure in the agricultural sector. The Preferred Reporting Items for Systematic Review and Meta-Analysis (PRISMA) method and a bibliometric analysis were used to collect and analyze articles from Scopus, ScienceDirect, and Dimensions databases. The results showed that there were 15 articles on determining a rainfall index-based agricultural insurance premium, where 4 used the Black–Scholes method and 11 applied other main methods. Meanwhile, no articles applied the fractional Black–Scholes method in determining agricultural insurance premiums based on the rainfall index, providing new opportunities for further research. The results contributed to the development of a model for agricultural insurance premium determination that could generate more diverse and flexible premium estimates as a sustainable method to mitigate the risk of harvest failure. This research is expected to serve as a reference for developing rainfall index-based agricultural insurance in the future and contribute to the Government of the Agriculture Department’s policy formulation regarding insurance programs for farmers.

Heterogeneous effects of agricultural insurance on agricultural green development: evidence from Sub national economies of India

The current paper aims to assess the relative competitiveness of agricultural green development across 27 Indian states and explore the factors influencing this development. Given India's significant role as a global producer of various crops such as rice, wheat, sugarcane, cotton, and pulses, and with approximately 43.96 percent of the labour force engaged in agriculture, the sector's performance is crucial for achieving Sustainable Development Goals (SDGs). The green development index has been created through the entropy method by using seven variables, where Uttar Pradesh and Telangana demonstrate higher green competitiveness. Conversely, states like Himachal Pradesh, Uttarakhand, and Punjab exhibit lower levels of green competitiveness due to their elevated consumption of fertilizers and pesticides. To understand the determinants of agricultural green development competitiveness, Quantile regression has been employed. The findings highlight a positive relationship between (the endogenous variable) and Per capita income, Bank branches in rural areas, hectares of land insured and capital expenditure on agriculture whereas increased cropping intensity and power availability per capita has negative relationships. Furthermore, employing the Dumitrescu and Hurlin (2012) panel Granger causality test reveals that economic growth at the state level in India precedes and influences agricultural green development. This suggests a dynamic relationship wherein economic progress fosters advancements in agricultural sustainability.

FACTORS INFLUENCING THE ADOPTION OF AGRICULTURAL INSURANCE AMONG CROP FARMERS AS CLIMATE CHANGE ADAPTATION STRATEGY IN BORNO STATE, NIGERIA

The study examined the adoption of agricultural insurance among crop farmers as climate change adaptation strategy in Borno State, Nigeria. Multistage stage sampling technique was used in selecting 270 respondents for the study. Data were collected using structured questionnaire and analysed using descriptive and inferential statistics. The results reveal that the majority of respondents were between 36 and 49 years old, with a mean age of 37 years. Majority (60.7% and 80%) of the respondents were male and married. The mean household size, farm size, farming experience, and income of the respondents were 7 persons, 2 hectares, 7 years and ₦261,300, respectively. A reasonable proportion (37.8%) of the respondents had secondary education with majority (74.8%) having no access to credit. Most (83.0%) of the respondents in the study area had access to extension services. Majority (69.3%) of the respondents were aware of agricultural insurance. with a mean of 2 years of awareness. Half (50.0%) of the respondents sourced information on agricultural insurance from cooperatives. The major type of insurance adopted by the respondents were theft (20.0%), diseases (17.0%), and pest outbreaks (15.9%). The factors influencing the adoption of agricultural insurance in the study area were age (P < 0.01), educational level (P < 0.05) and access to extension services (P < 0.01). The major constraints to the adoption of agricultural insurance in the study area include high premium costs (71.1%) and inadequate awareness (70.0%) to mention few. The study concludes that age, education level and access to extension services were the factors influencing adoption of insurance as climate change adaptation strategy in the study area. The study recommends that the government and non-governmental extension services should embark on sensitization campaign to raise the awareness crop farmers on the importance of insurance and effort should be made by the concern stakeholders to subsidize the premium in order encourage patronage.

Mapping agents: A spatial economic analysis of agent location in the Federal Crop Insurance Program

AbstractCrop insurance is delivered to farmers and ranchers through a partnership among the Federal Crop Insurance Corporation (FCIC), part of the United States Department of Agriculture, and the crop insurance industry. The FCIC offers financial incentives, through reinsurance and subsidies, to private insurance companies for insurance contracts sold in accordance with the Standard Reinsurance Agreement (SRA). Crop insurance agents play an important role in the delivery of the federal crop insurance program, acting as intermediaries between farmers and crop insurance companies. Little is understood about the supply of crop insurance agents and the role of government policy in the provision of agent services, particularly after the 2010 SRA. We model the equilibrium supply of crop insurance agents to derive testable hypotheses about the factors that influence agent concentration across space. We evaluate our model using spatial econometric techniques and a novel dataset of crop insurance agent locations by county. Generally, forces that raise agent compensation, including the degree of competition among insurance companies, are shown to increase the local supply of agents. Results vary by government‐defined reinsurance regions. Notably, historical average premium rates, which both reflect actuarial risk and influence farmer insurance demand, are negatively related to agent competition in the low‐risk Group 1 states, which contributes over 40% of insured liabilities. These factors produce spatial spillovers, suggesting the presence of agglomeration effects in the market for agent services. Proposed changes to the SRA should consider impacts on the regional distribution and local supply of agents.

Growers’ behavioral intentions towards agricultural insurance participation: Big Five personality traits within the TPB framework

This study seeks to establish the influence of the Big Five personality traits, which include Openness, Neuroticism, Conscientiousness, Agreeableness, and Extraversion, on growers’ willingness to embrace crop insurance schemes. Furthermore, it explores the role of Attitude, Subjective Norms, and Perceived Behavioral Control, as proposed in the Theory of Planned Behavior (TPB), on this relationship. Using a structured questionnaire, data were collected from 412 growers of arecanut and pepper. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) via Smart-PLS 3.3. The analysis revealed that Perceived Behavioral Control (β = 0.462**), Subjective Norms (β = 0.260**), and Attitude (β = 0.115**) positively influenced growers’ behavioral intentions. Interestingly, the Big Five personality traits themselves did not have a direct effect on these intentions. Further mediation analysis demonstrated that Attitude and Subjective Norms fully mediated the effects of Extraversion (α = 0.026**, β = 0.069), Neuroticism (α = 0.019**, β = –0.016), and Openness (α = 0.024**, β = 0.069) on Behavioral Intention. However, these variables did not mediate the relationship between Agreeableness (α = 0.011, β = 0.058), Conscientiousness (α = –0.017, β = –0.080), and Behavioral Intention. Additionally, perceived behavioral control mediated the link between personality traits and intention, though this was not the case for Conscientiousness. This study contributes to the application of the TPB by incorporating the Big Five personality traits and exploring their interaction with the TPB dimensions.

Retraction: Application of Index Insurance in Iran's Agriculture: case of wheat growers.

[This retracts the article doi: 10.1590/1519-6984.285326].

Extreme Weather, agricultural insurance and farmer's climate adaptation technologies adoption in China

We explore how farmers adjust their climate adaptation behaviors and participation in agricultural insurance in response to extreme weather events. A random effects model is constructed to clarify the relationships between extreme weather events, agricultural insurance and climate adaptation technologies (CAT). Using survey data from 622 farmers in China, Probit models and instrumental variable analysis show that extreme weather events significantly increase farmers' adoption of CAT and their participation in agricultural insurance. Furthermore, agricultural insurance significantly promotes farmers' adoption of CAT. Agricultural insurance influences the adoption of CAT through both substitutive and complementary effects, the complementary effects are more pronounced. Therefore, we recommended the continued promotion of CAT and agricultural insurance to strengthen farmers' resilience to extreme weather events.

Evaluation Trial of Drought Damage of Rice Based on RGB Aerial Image by UAV

Unmanned Aerial Vehicle (UAV) remote sensing is recommended to evaluate damage quickly and quantitatively. Therefore, this study aimed to explore the use of RGB aerial images by UAV for evaluating drought damage of rice through canopy color and coverage. The procedures were conducted in the dry season of 2018 (August – September 2018) at the Balitkabi Experimental field, Muneng, Probolinggo, Indonesia. A split-plot experimental field design was used with 2 factors, namely drought treatments at growth stage (Vegetative/P1, Reproductive/ P2, Generative/P3, and Control/P0), and varieties (Jatiluhur/V1, IPB9G/V2, IPB 3S/V3, Hipa 19/V4, Inpari-17/ V5, Mekongga/V6, Mentik Wangi/V7, Ciherang/V8). Canopy temperature data were then obtained using FLUKE 574 Infrared Thermometer, while images were taken with an RGB camera (Zenmuse X5) attached to Drone DJI Inspire I. The images were taken twice during the treatment (4 DAT and 15 DAT), followed by analysis using QGIS 2.18 and ImageJ. The results showed that RGB aerial images by UAV could be used in agricultural insurance in Indonesia, and similar countries around the world. Although the effect on yield needed to be evaluated, quick assessment by UAV was still an effective tool. In addition, drought damage evaluation through canopy color was better than canopy coverage in terms of analysis. The conversion from RGB to Lab color space increased the determination coefficient in multiple regression of color values against temperature difference (Tc-Ta).

The impact of InsurTech on advancing sustainable specialty agricultural product insurance in China

The development of specialized agricultural product insurance is crucial for perfecting China’s agricultural insurance system and promoting rural revitalization. Currently, specialized agricultural product insurance in China faces numerous challenges in key areas such as rate determination, risk assessment, and loss adjustment, which have become bottlenecks restricting its sustainable development. This paper explores how insurance technology (InsurTech) can enhance the ecological system of specialized agricultural product insurance through technological innovation and overcome these industry pain points. It elaborates on how InsurTech can enhance farmers’ interactive experience and satisfaction, improve the management efficiency of insurance companies, strengthen government regulation, and promote the sustainable development of the insurance business. Moreover, this study deeply analyzes the practical barriers in implementing InsurTech and proposes corresponding strategies, including establishing innovative incentive mechanisms, improving relevant policies and regulations, building a multidimensional data platform to achieve data interoperability, and strengthening the construction of digital rural infrastructure to enhance farmers’ technological literacy, thereby advancing the sustainable development of InsurTech in specialized agricultural product insurance.

Time Series Analysis and Optimization of the Prediction Model of Agricultural Insurance Loss Ratio

For ensuring successful financial planning to perform sustainable farming, one key sector is to provide solutions that could accurately predict the agricultural loss ratios. In China, the Henan province is considered to be an agricultural center that is primarily exposed to drastic weather fluctuations that directly impact the crop yields. This study was conducted in Henan province from January 2020 to December 2023. With the data collected from that period, the study proposes a combinatory model combining Deep Gaussian Processes with Bayesian Long Short-Term Memory (LSTM) networks. The model was trained on data encompassing weather conditions, agricultural practices, and historical insurance claims. The experimental analysis was conducted against other traditional models, including ARIMA and Support Vector Regression. The RMSE improvement of the proposed model was around 7.2% on training data and 8.2% on test data, which demonstrates enhanced predictive accuracy. The enhanced performance of the proposed model was reflected in its effectiveness in reducing log-likelihood errors across training epochs. The model had demonstrated better robustness in handling complex and multi-dimensional agricultural data.

Impact of Digital Villages on Agricultural Green Growth Based on Empirical Analysis of Chinese Provincial Data

The construction of digital villages has progressed in tandem with the transformation of traditional production methods, offering new perspectives for agricultural green growth and sustainable development. This study employs the entropy value method alongside the super-efficient global SBM (Slacks-Based Measure) mixed function model, which assesses efficiency by accounting for both inputs and outputs, thereby facilitating a comprehensive evaluation of agricultural green growth. This methodology facilitates the examination of the correlation between digital villages and agricultural green growth, as well as the influence of digital villages on this growth. Furthermore, the utilization of financial resources is employed as a mediating variable to elucidate the mechanism of action. The utilization of green finance and agricultural insurance can be facilitated by the establishment of digital villages, and that has been shown to promote agricultural green growth. Additionally, the promotion of agricultural green growth by digital village construction is stronger in middle-altitude regions, non-grain-producing regions, and regions where the digital literacy of the rural labor force is higher than average, as well as areas where the use of agricultural film is higher than average. Accelerating the construction of digital villages and promoting the utilization of rural financial resources while adapting the digital village development to local conditions are crucial for effectively fostering agricultural green growth and sustainable agricultural development.

Effects of Agricultural Insurance on Water Pollution in China

Water pollution is the most serious environmental problems in China now, water pollution directly affects people's quality of life and the sustainable development of agriculture, and the biggest source of water pollution is agricultural non-point source pollution, so we need to pay more attention to the environmental impact of agricultural production and reduce agricultural non-point source pollution. This paper examines the environmental impact of agricultural insurance on water pollution. Using annual data from 30 provinces across China between 2011 and 2019, this paper employs a two-way fixed-effects model to examine the correlation between agricultural insurance development and agricultural pollutant emissions. Additionally, it takes agricultural carbon emissions and agricultural output value as dependent variables to comprehensively investigate the environmental and economic impacts of agricultural insurance. The research results indicate that the development of agricultural insurance has a significant effect on reducing agricultural water pollution and carbon emissions. The pollutant reduction effect is more significant in the major grain-producing areas. The positive environmental effect of agricultural insurance is based on the fact that the development of agricultural insurance is conducive to reducing the use of pesticides and chemical fertilisers and does not come at the expense of increased agricultural output.

The impact of agricultural insurance on farmers’ mental health: what we can learn from the literature

AbstractThis systematic review aimed to examine evidence in the extant literature on the nexus between agricultural insurance and the mental health of farmers. The key hypothesis was that increasing access to agricultural insurance will enhance the mental and emotional well-being of farmers globally and will consequently preserve the future of agriculture, particularly as climate change exacerbates weather risk. A systematic review was conducted using the Preferred Reporting Items for Systematic Reviews and Meta-Analysis (PRISMA) statement. We searched several databases, including EBSCOHost Megafile, Scopus, Web of Science, PubMed (Medline) and Google Scholar, based on predetermined criteria in July 2024. We conducted a full-text review of twelve potential articles. None of the articles met the inclusion criteria and reported a clear understanding of the relationship between access to agricultural insurance and the mental health nexus. We concluded that there is no evidence to support the hypothesis that access to agricultural insurance has a positive impact on farmer’s mental health. Our hypothesis is premised on the fact that while agricultural insurance smoothens farmers’ income, this should lead to some forms of mental health advantage, but we do not have any evidence in extant literature. The lack of literature is perhaps due to the complexity of the agricultural insurance product design. We recommend studies that will provide reliably conclusive evidence on this critical issue because agriculture requires risk management tools to help farmers cope with multidimensional risks, including exacerbated weather events due to climate change.

The Impact of the WTO Agricultural Agreement on Developing Countries

Abstract: Agricultural insurance, as an agricultural risk management tool to disperse agricultural risks, compensate farmers' losses and safeguard agricultural production, has become an indispensable part of the agricultural security system in various countries. However, due to the high cost of agricultural insurance, many countries provide financial subsidies for agricultural insurance. This paper introduces the help of agricultural insurance subsidies to countries in World Trade Organization (WTO), summarizes the main features and inadequacies of relevant WTO rules, and analyzes the existing problems of agricultural insurance subsidies from four aspects based on the practice of American agricultural insurance subsidies. The main conclusions of this paper include: first, the rules of agricultural insurance subsidy are limited and the classification is not clear, which seriously harms the agricultural development of developing countries; second, income insurance and natural disaster insurance in premium subsidies are regarded as "green box" tools, which need to meet certain conditions, otherwise there is still the possibility of being regarded as "amber box" tools; third, the current WTO rules on agricultural insurance subsidies are more conducive to the development of developed countries, but the agricultural insurance subsidies in developing countries lag behind and are difficult to implement, and the rules on agricultural insurance subsidies urgently need to be improved. Fourth, the double standards of developed countries and developing countries have caused differences in the classification of agricultural insurance subsidies. Finally, the thesis puts forward some suggestions on the compliance development of China's agricultural insurance subsidies under the framework of WTO rules.

Agricultural Insurance and Selection of Soil Testing and Formula Fertilization Technology—An Empirical Study Based on the Main Rice-Producing Areas in China

Agricultural Insurance and Selection of Soil Testing and Formula Fertilization Technology—An Empirical Study Based on the Main Rice-Producing Areas in China

Insurance Solution for Climate Change: Legislation Analysis in Türkiye

In the light of changing and evolving parameters throughout the World, risk definitions vary as well, leading to the necessity to make new risk definitions in various fields in addition to those, the effects of which can be easily observed and measured, such as technology and information securiAty. This change also manifests itself in the insurance industry based on climate change. The increase in the number and scale of climate-based natural disasters throughout the World, in conjunction with global warming, made the economic losses caused by natural disasters visible. Climate changeA caused and will continue to cause significant changes in many fields of the insurance industry, such as property insurances, agricultural insurances, and health insurance. The insurance industry attempts to mitigate the negative impacts of climate change through active risk measures such as mapping, risk analysis, funding research, collective data sharing, and active participation in climate protection activities throughout the World. However, it is crucial for the State and affiliated public enterprises to support this process as a regulatory and adequate power, create a suitable legal, financial and regulatory framework for private sector initiatives, and conduct informative activities about the importance of insurance in natural disasters. Emerging financial burden should be divided between individual-public-private enterprises, and this division should be made in a balanced and fair manner in the light of the applicable legislation. This study primarily addresses the devastating impacts of climate change on the World and Turkey, which emerged notably in the recent era and the financial burden brought about by this. Then the issue of responsibility of the public sector, which is responsible for taking necessary and adequate measures against climate change, was explored in the context of both national legislation and international agreements. The adequacy of the applicable legislation for the State and public enterprises to create a suitable consciousness-raising, a preventive and compensatory legal framework specific to the climate change in Turkey was reviewed, and suggestions were made.

On the Predicament and Countermeasures of Agricultural Product Brand Construction in Cooperatives

Brand building of agricultural products can not only bring direct economic benefits to cooperatives, but also improve the internal environment of cooperatives through large-scale and standardized production and operation, as well as improve the external industry and market environment through regional brand building of agricultural products, while cooperatives can improve their own social service system in brand building. And promote the development of local tourism and service industry through the exploration and publicity of the cultural attributes of the brand. However, the brand construction of cooperative agricultural products is faced with many difficulties, such as weak brand awareness of members, lack of professional personnel, difficult quality and safety supervision under decentralized production and management mode and poor competitiveness of individual brands, outdated production and marketing mode, and imperfect financial services matching brand construction. This paper analyzes the difficulties encountered by cooperatives in brand building and puts forward construction measures, and holds that relevant departments should strengthen the cultivation of brand awareness of cooperatives; Cooperatives should increase the reserve and training of professional personnel, individual cooperatives should rely on the scale and resource advantages brought by regional brand building or association to carry out their own brand building, and at the same time use modern marketing means to expand their own sales channels; The government should regulate the operation of financial institutions and increase the popularity of agricultural insurance.

Meta Analysis of The Role of Agricultural Insurance in Enhancing Farmers' Financial Independence

Kami melakukan penelitian ini pada bulan September 2024 dengan mencari basis data Scopus.com secara khusus untuk asuransi petani, yang menghasilkan maksimum 69 artikel sebagai sampel dari publikasi antara tahun 1984 dan 2024. Kami melakukan pengambilan metadata menggunakan aplikasi Scopus.com dan menganalisis data secara deskriptif. Kami mengekspor data ke format CSV Excel dan menganalisisnya lebih lanjut menggunakan VOSViewer (VV) versi 1.6.20 untuk menggambarkan lanskap penelitian dengan akurat. Temuan menunjukkan fluktuasi dalam publikasi tentang asuransi petani dari tahun 1984 hingga 2024, dengan Aboonajm menjadi peneliti yang paling produktif. Sumber utama untuk publikasi yang dipilih adalah Sustainability Switzerland, QRC Advisor, dan Agricultural Finance Review. Jenis dokumen yang paling umum adalah Artikel, makalah konferensi, dan tinjauan, sementara China, Amerika Serikat, dan Indonesia dalam pengembangan asuransi petani. Kami mengidentifikasi Kementerian Kesehatan dan Kesejahteraan, Universitas Zhejiang, dan Universitas Nasional Taiwan sebagai tiga afiliasi paling berpengaruh dalam penelitian asuransi petani yang diteliti. Analisis tersebut juga menunjukkan Secara umum, asuransi petani telah menjadi topik penting karena perannya dalam mengatasi risiko yang dihadapi oleh petani, seperti perubahan iklim dan ketidakstabilan pasar. Asuransi ini memberikan perlindungan finansial, membantu petani pulih dari kerugian dan menjaga stabilitas pendapatan. Inovasi seperti asuransi berbasis indeks, yang memanfaatkan teknologi dan data, telah meningkatkan aksesibilitas, terutama bagi petani skala kecil. Selain melindungi dari risiko jangka pendek, asuransi juga mendorong investasi jangka panjang dalam praktik pertanian berkelanjutan, menjadikannya alat yang sangat penting untuk ketahanan pertanian.

DETERMINING AGRICULTURAL INSURANCE PREMIUMS USING THE BLACK-SCHOLES APPROACH BASED ON LINEAR REGRESSION OF POTATO PRODUCTION AND PRICES

Price fluctuations, which often occur in the agricultural sector, cause farmers to experience losses when selling prices are not balanced with production costs. The government is trying to minimize farmers' losses by issuing an agricultural insurance program. One of the problems with agricultural insurance is determining the premium that farmers must pay so as not to disadvantage the insurance company. This paper explores the price of insurance premiums associated with potato cultivation in West Java, Indonesia. In addition, this research analyzes the factors that influence prices by focusing on the relationship between potato production levels and market prices. Therefore, a comprehensive data set of potato production data and associated prices is used. Regression analysis, as a statistical technique, is used to model the relationships. The Black-Scholes method then uses the obtained result to determine insurance premiums. This method is used due to a theoretical framework for pricing options that allows selecting an option's fair price using a structured, defined methodology that has been tried and tested. The premium values that depend on the trigger value are then obtained with a range of prices between IDR 5,687,670 and IDR 18,067,953 for an insured amount of IDR 39,403,000 per contract period. The premium price range allows farmers to choose the right agricultural insurance policy. It also allows insurance companies to determine insurance premiums for potato cultivation.

Analyzing the Relationship between Agricultural AI Adoption and Government-Subsidized Insurance

Due to the increased unpredictability and severity of weather patterns caused by climate change, traditional farming practices and risk management strategies are becoming increasingly inadequate. In this paper, we explore the literature to understand the potential of artificial intelligence (AI) in mitigating climate-related agricultural risks and the pivotal role that public institutions play in encouraging farmers to adopt such technologies. We propose a framework to integrate AI into government-subsidized insurance structures, focusing on reduced premiums through government intervention. We argue that AI’s potential to reduce the uncertainty and severity of climate-induced damages could lower the overall risk profile of insured farmers, thereby justifying lower premiums in the long run. We further discuss the implications of such policies on insurance markets, agricultural sustainability, and global food security. Our initial exploration contributes to the literature by addressing a relatively underexplored intersection of two critical fields—agricultural insurance and artificial intelligence—suggesting directions for future research.