JWSS - Journal of Water and Soil Science

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Agricultural insurance is one of the appropriate ways to overcome the risk in agricultural production and to increase farmers’ income security. In this study, the influence of wheat insurance, as personal-free insurance, and sugar beet insurance, as group-forcible insurance, on farmers’ risk attitudes in Fars Province were investigated as a case study. Data were collected using stratified multi-stage cluster sampling method and interviews in the years 1375-1376. The sample included wheat and sugar beet farmers in three different climates including Mediterranean, warm sub-desert and cold mountainous in Fars Province. Results of estimating risk aversion coefficients of farmers, using Safety First Rule (SFR), showed that sugar beet forcible insurance along with giving inputs, mechanization services, lookout of farms by sugar plants led to continuous insurance purchase by farmers in consecutive years. Therefore, sugar beet farmers tended to welcome insurance and the effect of insurance on their risk aversion coefficients was positive. However, discontinuity of insurance purchase by wheat farmers in consecutive years and farmers’ lack of confidence in insurace system caused the influence of insurance on wheat farmers’ risk aversion coefficient to be insignificant. Thus, sugar beet insurance type is closer than wheat insurance type to one of the main aims of agricultural insurance system, which is increasing farmers’ tendency to take risks.

Keywords: Insurance, Risk, Risk aversion, Safety First Rule, Group- forcible insurance, Personal- free insurance

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