Adoption of crop insurance among paddy farmers in Nintavur DS division of Ampara district

Abstract

Crop insurance is an efficient risk management tool used in agriculture which secures the socio-economic situation of farmers. Crop insurance helps to stabilize farmers’ income, encourage farmers to adopt improved technologies and reduce the risk for credit agencies which can result in an increased flow of credit to farmers. This study was aimed to assess the adoption of crop insurance among paddy farmers in Nintavur DS division of Ampara district. Both primary and secondary data were used in the study. The primary data were gathered from randomly selected 100 paddy farmers from 05 Grama Niladhari divisions of Nintavur DS division by using self-administered questionnaires. Collected data were analyzed by using SPSS software. Chi-square and correlation analysis were done to find out the associations and relationships among different variables. There were two types of farmers identified in the sample; insured and non-insured farmers. Around 80% of the farmers had cultivated paddy on their own land and rest on leased land. Extent of paddy cultivation during the Maha season and the Yala seasons was almost equal in the study area. The average paddy yields in Maha and Yala were 81.54 bushels/ac and 77.81 54 bushels/ac respectively. Further, only 10% of the farmers in the study area had adopted paddy insurance scheme. All the farmers who obtained credit (10% of the sample) have insured their paddy land. There was a highly significant relationship observed between the extent of insured land and the amount of premium paid. Low farmer participation in crop insurance scheme was mainly due to the reasons that far distance of insurance office and higher premium rate. These factors need to be considered by the relevant authorities when operating the paddy insurance scheme.