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Resumen de Evaluating willingness to pay for agricultural insurance and determinants of agricultural insurance purchasing in Samsun province of Türkiye

Hatice Türkten, Çağatay Yıldırım, Vedat Ceyhan

  • The study focused on the farmers’ potential risks, willingness to pay (WTP) for agricultural insurance, and factors affecting the purchasing of agricultural insurance associated with their farm types. The objectives of the study conducted in Samsun province of Türkiye are (i) to bring out the link between individually insurable risk and agricultural insurance purchase, (ii) to calculate the amount of farmers’ willingness to pay for insurance policy, (iii) to explore the determinants of insurance policy purchasing, (iv) to examine the effects of farmers’ communication level, social participation and information sources on the insurance purchasing, and (v) to reveal the relationship between amounts of purchased agricultural insurance and insurance premium. Farm operators’ willingness to pay (WTP) for purchasing agricultural insurance were elicited by using the Contingent Valuation Method (CVM). Sensitivity of the farm operators to insurance premium changes explored by using Tobit models. Research results showed that 72.6% of farms had the insurable risk and 67.3% of these farms purchase insurance. Based on the logit analysis, risk exposure, land tenure, subsidy and agricultural insurance’s awaraness positively affected the purchasing insurance. CVM analysis explored that the average amount of WTP for agricultural insurance was 28% of the current insurance premium. The study suggests that revising the content of insurance policy, solving payment disputes and expanding the policy coverage may accelerate farmers’ adoption to agricultural insurance. Decision makers and insurance company should consider not only WTP and elasticities of agricultural insurance demand, but also the farm type differentation when determining the subsidies number and insurance premium.


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