Full Length Research Paper

A study of natural risk affecting adoption of crop insurance: A case study of Kurdistan, Iran December 2007

H. Agahi¹ and Abdolali Bahrami²

¹Agricultural Extension and Education, College of Agriculture, Razi University, Kermanshah, Iran.

²DOS in science, University of Putra, Malaysia, 43400 Serdang, Selangor Malaysia.

*Corresponding author. E-mail: hosseinagahi_raziuniversity@yahoo.com.

Accepted 26 August, 2008

   Abstract

Crop insurance is an effective method which is being practiced by farmers in all economic sectors at all seasons in order to be able to minimize natural risk. Crop insurance is being considered as a proper mechanism for protecting financial resources of farmers. The purpose of this descriptive survey study was to investigate climate changes which are effective in the application of crop insurance in Kurdistan - Iran. Data were collected through 200 questionnaires which were completed by random sample of insured farmers in the year 2005 - 2006 from Kurdistan province in Iran. Face and content validity of the questionnaire were assessed by a panel of experts. A Cronbach's alpha reliability coefficient of .92 were obtained using a pilot test (N = 30) farmers who were not included in the study. Results of the study showed that the average application of crop insurance in the group with low degree of adoption was 30% of their entire under cultivation land while the results were 47 and 67%, for the group with the medium and high degree of adoption respectively. The regression analysis showed that forecasting the possibility of climate changes such as cold weather, frost, floods and drought display in total 56.7% of the variance for the application of crop insurance.

Key words: Adoption, risk, adverse events, agricultural products insurance.