FACTORS INFLUENCING FARMERS’ WILLINGNESS TO PARTICIPATE IN CROP INSURANCE: A STUDY IN SELECTED VILLAGES OF THE NORTH 24 PARGANAS DISTRICT OF WEST BENGAL

Abstract

Motivation: Weather plays a pivotal role in influencing agricultural output. Unfavourable weather events, pest attacks, and the impacts of climate change wreak havoc on farmers' fortunes. Crop insurance emerges as the sole risk management tool at farmers' disposal to confront production risks in farming. This issue demands special consideration in the Indian context, given that 85% of the nation's farmers are small and marginal, with limited capacity to withstand such risks. The scarcity of affordable institutional credit sources puts farmers in a precarious situation, leading to a burden of debt in the event of crop failure. This debt crisis has already resulted in farmer suicides across various regions of the nation. Against this backdrop, the study aims to assess the extent to which the implementation of the Central government's flagship crop insurance scheme, Pradhan Mantri Fasal Bima Yojana, since 2016, has encouraged farmers to actively participate in the programme as a risk mitigation measure in agriculture. Objectives: This study seeks to examine how various factors influence farmers' engagement in crop insurance within the study area and to identify key challenges that must be addressed to enhance farmers' involvement in the crop insurance scheme. Research Methodology: A survey employing a multi-stage sampling method was undertaken to select farming households as respondents for this study. In the initial stage, the Aamdanga block in the North 24 Parganas district of West Bengal was selected due to its high cropping intensity. Subsequently, four villages with the maximum number of cultivating households within this block were chosen in the second stage. In the final stage, 268 farmers were randomly selected for interviews, with the selection proportionate to the size of their land holdings. Subsequently, a logistic regression model is employed to assess how various factors considered in the study influence the likelihood of farmers participating in the crop insurance programme.Major Findings: The study reveals that farmers are more inclined to participate in the crop insurance scheme when they exhibit higher insurance awareness, possess experience in receiving indemnity for crop failure, have a history of borrowing from commercial banks, and hold larger landholdings. Conversely, the likelihood of engaging in the scheme decreases with age and the presence of alternative nonfarm income sources. Policy Relevance: The study suggests regularly organizing workshops in rural areas involving both banks and beneficiaries to boost insurance awareness among farmers. It also recommends the prompt settlement of insurance claims, increased utilization of technology such as drones and satellite imagery for faster damage assessment in case of crop failure, a reduction in premium subsidies, and timely notification of insured crops for a specific harvesting season. Originality: The study relies on a survey conducted by the author, ensuring the authenticity and originality of the data. Furthermore, it aims to address a research gap, as no prior study in this area has explored the factors influencing farmers' participation in crop insurance. This unique contribution can offer valuable insights to policymakers for refining their strategies.