Farmers' willingness to purchase crop insurance: evidence from wheat and raspberry sectors in Serbia

Abstract

Crop insurance is widely acknowledged to be a valuable instrument contributing to sustainability of agriculture by reducing the risks associated with crop production and by stabilizing farmers’ income. Despite the importance of the agricultural sector for the Serbian economy, level of crop insurance development is low. Therefore, there is a need to identify which characteristics most affect a farmer’s decision regarding whether or not to use this type of insurance. In this study, a sample of 255 farmers producing wheat and raspberry in the regions of Vojvodina and Sumadija and Western Serbia were interviewed using structured questionnaire. The collected data was analyzed using the binomial logistic regression to ascertain the effects of selected socio-economic and risk perception variables on the likelihood that farmer plans to purchase crop insurance. Farmer’s willingness to purchase crop insurance was found to be significantly influenced by age, farm size, income and perceived level of risk.