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Torkamani J. Measuring Willingness to Pay of the Insurance Premium for Agricultural Products and its Affecting Factors A Case Study of Wheat Growers in Fars Province. QJIA 2016; 12 (46) :21-48
URL: http://journal.sbkiran.ir/article-1-47-fa.html

The main objectives of this study were to investigate the parameters affecting farmers’
willingness to pay for insurance premiums using direct and indirect estimation
methods. Socioeconomical factors and farmers’ participation percentage in the
insurance scheme were investigated. Expected utility function was used in the indirect
estimation method. Also a reasonably fair insurance premium was defined. Using
random sampling method, primary data were collected from a sample of 150 wheat
growers of Marvdasht region by questionnaires in the 1392-3 crop year. Secondary
data were obtained using various sources such as the annual agricultural and statistical
reports, the Agricultural Jihad Ministry official website as well as Agricultural
Insurance Fund. The Results demonstrated that, insured farmers had higher average
incomes and also lower income variations. This led to a higher marginal utility in this
group. Moreover, the average willingness to pay insurance premiums was higher using
the indirect estimation method. This highlights the importance of considering factors
such as farmers’ preferences and their attitudes' to risk when calculating insurance
premiums. Overall results showed that, farmers are willing to pay higher premiums
when they are fully informed about the advantages of having an insurance policy and
are also guaranteed a fast and easy claiming process whenever is needed