What does this research mean for the field?

Liquidity constraints dominate wealth effects in determining crop insurance uptake among Indian farmers, with higher demand driven by risk aversion in socially marginalized communities, older age, and specific regional factors. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To identify the behavioral, financial, and socioeconomic mechanisms explaining why only about 5% of agricultural households adopt crop insurance.

August 22, 2026Agribusiness

Why Do Few Farmers Insure Their Crops in India? A Choice Theoretic Explanation

View Full Paper

Ask AI

Bookmark

Authors

AKAmar Kumar KPKirtti Ranjan Paltasingh JPJajati Keshari Parida

Discussion

Member takes

Overview

Econometric analysis reveals liquidity constraints and risk aversion drive crop insurance uptake among agricultural households, highlighting the need for improved credit access and targeted coverage.

Key Points

To identify the behavioral, financial, and socioeconomic mechanisms explaining why only about 5% of agricultural households adopt crop insurance.
Formulated a choice-theoretic model framing crop insurance demand as an outcome of household expected utility maximization.
Analyzed unit-level data from the National Sample Survey's Situation Assessment Survey of Agriculture Households using Instrumental-Variable (IV) Probit regression models.
Liquidity constraints dominate the wealth effect in determining agricultural insurance adoption decisions.
Socially marginalized communities (SCs, STs, and OBCs) and middle-aged or elderly farmers demonstrate a higher propensity to insure crops, reflecting heightened risk aversion.
Uptake exhibits marked regional disparities, with farmers in Southern, Western, and Central regions taking up insurance at higher rates than those in the North-Eastern region.

Cite This Study

Kumar et al. (2026) studied this question.

synapsesocial.com/papers/6a895fd3ca7ade938187eaab https://doi.org/10.1002/agr.70151

View Full Paper

Ask AI

Bookmark

August 22, 2026Agribusiness

Why Do Few Farmers Insure Their Crops in India? A Choice Theoretic Explanation

View Full Paper

Ask AI

Bookmark

Authors

AKAmar Kumar KPKirtti Ranjan Paltasingh JPJajati Keshari Parida

Discussion

Member takes

Overview

Econometric analysis reveals liquidity constraints and risk aversion drive crop insurance uptake among agricultural households, highlighting the need for improved credit access and targeted coverage.

Key Points

To identify the behavioral, financial, and socioeconomic mechanisms explaining why only about 5% of agricultural households adopt crop insurance.
Formulated a choice-theoretic model framing crop insurance demand as an outcome of household expected utility maximization.
Analyzed unit-level data from the National Sample Survey's Situation Assessment Survey of Agriculture Households using Instrumental-Variable (IV) Probit regression models.
Liquidity constraints dominate the wealth effect in determining agricultural insurance adoption decisions.
Socially marginalized communities (SCs, STs, and OBCs) and middle-aged or elderly farmers demonstrate a higher propensity to insure crops, reflecting heightened risk aversion.
Uptake exhibits marked regional disparities, with farmers in Southern, Western, and Central regions taking up insurance at higher rates than those in the North-Eastern region.

Cite This Study

Kumar et al. (2026) studied this question.

synapsesocial.com/papers/6a895fd3ca7ade938187eaab https://doi.org/10.1002/agr.70151

View Full Paper

Ask AI

Bookmark