Does Agricultural Insurance Premium Subsidy Benefit the Primary Industry?

2019 ◽  
Author(s):  
Yugang Ding ◽  
Cheng Sun
Keyword(s):  
Insurance Premium ◽  
Primary Industry ◽  
Agricultural Insurance

scholarly journals PENENTUAN NILAI PREMI ASURANSI PERTANIAN BERBASIS INDEKS CURAH HUJAN PADA KOMODITAS KEDELAI YANG DISIMULASI MENGGUNAKAN DISTRIBUSI WEIBULL

2020 ◽  
Vol 9 (4) ◽  
pp. 257
Author(s):  
NI PUTU AYUNDA SURYA DEWI ◽  
KOMANG DHARMAWAN ◽  
KARTIKA SARI
Keyword(s):  
Insurance Premium ◽  
Weather Generator ◽  
Rainfall Data ◽  
Simulated Rainfall ◽  
Crop Failure ◽  
Agricultural Insurance ◽  
Stochastic Weather Generator ◽  
Insurance Premiums ◽  
Rainfall Index ◽  
Insurance Costs

Agricultural insurance protects farmers who experience crop failure. This study aims to calculate the value of agricultural insurance premium by applying simulated rainfall index-based using stochastic weather generator on soybean commodities in Negara sub-district. This study are used rainfall data to determine the probability of the transition, then perform rainfall simulations using the Stochastic Weather Generator method to obtain trigger values and continued with the calculation of agricultural insurance premiums. Results of this study provide the value that higher trigger is taken, the greater the insurance premium that must be paid. The value of insurance premiums to be paid is 4,18% - 5,66% of insurance costs Rp2.605.000,00.

scholarly journals PENENTUAN NILAI PREMI ASURANSI PERTANIAN BERBASIS INDEKS SUHU PERMUKAAN MENGGUNAKAN METODE BURN ANALYSIS

2018 ◽  
Vol 7 (4) ◽  
pp. 322
Author(s):  
A.A DWI MARSITA ANGGRAENI ◽  
KOMANG DHARMAWAN ◽  
DESAK PUTU EKA NILAKUSMAWATI
Keyword(s):  
Risk Management ◽  
Surface Temperature ◽  
Insurance Premium ◽  
Analysis Method ◽  
Agricultural Insurance ◽  
Temperature Index ◽  
Premium Payment ◽  
Long Run ◽  
Related Risk ◽  
Climate Parameter

Temperature is an important factor in the production of agricultural commodities. For this reason, goverments needs to protect farmers in order to continue their farming. Climate-based agricultural insurance is an alternative to climate-related risk management. Insurance premium is given when the temperature index lower than the pre determined trigger index. The purpose of this study is to determine the stages and assumptions in determining the value of agricultural insurance premiums based on surface temperature index on cocoa commodities using the method of burn analysis. The temperature index was determined using the burn analysis method with the temperature as the climate parameter. Trigger values ??are determined based on long run times. In this paper, the result is that when the temperature index lower than the determined trigger value, trigger payments as much as Rp.10.931.960,40 / Ha based on trigger index as many 26.145 ° C, so amount of premium payment equals Rp 215.776.

scholarly journals Analysis of the Brazilian Program of Subsidies for Rural Insurance Premium: Evolution from 2005 to 2014

2016 ◽  
Vol 10 (7) ◽  
pp. 87
Author(s):  
Pedro Loyola ◽  
Vilmar Rodrigues Moreira ◽  
Claudimar Pereira Da Veiga
Keyword(s):  
Risk Mitigation ◽  
Supply And Demand ◽  
Insurance Coverage ◽  
Descriptive Analysis ◽  
Insurance Premium ◽  
Growth Potential ◽  
Agricultural Policies ◽  
Agricultural Insurance ◽  
Brazilian Government ◽  
General Data

<p>Rural insurance is inserted in the field of agricultural policies to mitigate risks that farmers face. It was an innovation for the Brazilian government from the implementation standpoint, despite the existence of similar programs in other countries. The purpose of this paper is to assess the recent evolution of the Brazilian Rural Insurance Premium Subsidy Program (PSR) and its main variables: amount insured area, policies, average area, benefiting producers, total premiums involved and total subsidy. The study examined in detail the PSR representation by region and farming. In order to evaluate the results of this program on agricultural policy, an exploratory and descriptive analysis was performed with the objective of studying the evolution of the Brazilian rural insurance in the context of PSR, using the information available in the Ministry of Agriculture, Livestock and Supply (MAPA) about the program. The information and data were collected between July and August 2015. The study was based on data collected from 2005 to 2013 with some general data of 2014 program included in the study. Even though the focus of the analysis was on the most recent years, 2009-2013. Data analysis revealed that the increased supply and demand for rural insurance is in the South and in the agricultural modalities for grains and fruits, with growth potential in other sectors and other regions in the country. PSR, as public policy, was responsible for the expansion of the rural insurance market in Brazil, encouraging and providing the access of producers to agricultural insurance by subsidizing the premium fee. Although this expansion has been slow and gradual, Brazil had in 2013 about 13.8% of the agricultural area with rural insurance coverage. This reveals the need for expanding the program to popularize this important risk mitigation tool.</p>

scholarly journals Evaluating Farm-Level Crop Insurance Demand in China: A Double-Bounded Dichotomous Approach

2016 ◽  
Vol 8 (3) ◽  
pp. 10
Author(s):  
Ruojin Zhang ◽  
Dan Fan
Keyword(s):  
Crop Insurance ◽  
Developed Countries ◽  
Insurance Premium ◽  
Likelihood Method ◽  
Insurance Demand ◽  
Agricultural Insurance ◽  
Farm Level ◽  
Adoption Decisions ◽  
Subsidy Program ◽  
Ministry Of Finance

<p>In 2007 the Chinese Ministry of Finance (CMF) approved the pilot agricultural insurance subsidy program, which tremendously promoted the growth of the agricultural insurance market. However the insurance adoption rate is still low comparing to that of developed countries. The main objective of this paper is to investigate factors most influence growers’ crop insurance adoption decisions. To this end, we adopt a double-bounded dichotomous choice (DBDC) experiment. This bidding experiment is conducted through extensive in-person interviews with over 300 rural households in west China, Szechwan province. By using the maximize likelihood method we empirically estimate the effects of factors such as landholding, income and farming experience on the farm-level crop insurance demand. Results indicate that the majority (53 per cent) of rice growers are willing to pay a high crop insurance premium above ¥10 ($ 1.7). On the other side, about 23 per cent of growers value the crop insurance below ¥2 ($ 0.34). As expected, the effects of landholding, education and income are all positive and statistically significant. However, household size and farming experience adversely affect the insurance adoption decisions.</p>

Comparison study of agricultural insurance government subsidy and farmers' self-subsistent premium in Indonesia

2021 ◽  
pp. 1-24
Author(s):  
Muhammad Yasir Yusuf ◽  
Rahmat Fadhil ◽  
T. Saiful Bahri ◽  
Hafiizh Maulana
Keyword(s):  
Participation Rate ◽  
Insurance Premium ◽  
Policy Implications ◽  
Insurance Policy ◽  
Simulation Test ◽  
Agricultural Insurance ◽  
Management Tools ◽  
Subsidy Policy ◽  
The Government ◽  
Business Insurance

Agricultural Insurance as an embodiment of farmer protection and empowerment is carried out with The Rice Farming Business Insurance (AUTP) facility with an insurance premium scheme by the Government of 80% and 20% by farmers. This study aims to simulate the AUTP premium based on government's subsidy and farmers' self-subsistent premium. The simulation test used panel data estimates in Indonesia Province during 2016-2019. The AUTP premium simulation was identified through the Moderating Regression Analysis (MRA) approach, with the moderate variables being government subsidies and farmers' self-subsistent premium. The Government's premium subsidy policy became a pure moderator that significantly increased the AUTP land area by 0.057%. Meanwhile, the coefficient of the farmers' self-subsistent premium variable has a negative and significant effect on the realization of AUTP in Indonesia. The results of the policy simulation emphasize the importance of the government's role in encouraging the increase in the realization of AUTP through subsidizing premium assistance to farmers. The implication of this simulation of the MRA model is that the response and participation rate of the farmers' premium payments independently is not followed by an increase in the realization of AUTP in Indonesia. The policy implications in the simulation of the two equation models conclude the importance of managing subsidized farmer premium payments and self-subsistent schemes based on insured land and farmer insurance policy. Agricultural insurance policy needs to adopt risk management tools, diversify agricultural insurance programs, and calculate the willingness to pay agricultural insurance premiums appropriately.

scholarly journals PENENTUAN NILAI PREMI ASURANSI PERTANIAN PADA KOMODITAS KOPI BERBASIS HARGA INTERNASIONAL MENGGUNAKAN MODEL MEAN REVERSION DENGAN LOMPATAN

2017 ◽  
Vol 6 (4) ◽  
pp. 253
Author(s):  
INTAN LESTARI ◽  
KOMANG DHARMAWAN ◽  
DESAK PUTU EKA NILAKUSMAWATI
Keyword(s):  
Monte Carlo Simulation ◽  
Monte Carlo ◽  
Production Cost ◽  
Mean Reversion ◽  
Jump Diffusion ◽  
Insurance Premium ◽  
Agricultural Insurance ◽  
Premium Payment ◽  
International Prices ◽  
Search Data

Agricultural insurance with the interantional price is new insurance in Indonesia. The international insurance premium is given if the international prices lower than the determined trigger value. The purpose of this study is to presents the steps needed to determine the premium value of the agricultural insurance. The steps are to search data of the international prices and local prices commodity coffee, calculate the return of both data, calculate descriptive statistic, calculate correlation between international prices of commodity coffee and local prices commodity coffee, estimate the parameter by using Maksimum Likelihood Estimasi(MLE), to do the Monte Carlo simulation by using Mean Reversion with Jump Diffusion, to determine the production cost, normality log test, to determine the trigger indexs, and to count the premium value with put cash-or-nothing option. On this study if international prices lower than the determined trigger value, trigger payments as much as Rp 20.248.282,4/Ha based on trigger index as many Rp 24.900/kg, so amount of premium payment equals Rp 334.000.

scholarly journals Risk aversion level influence on farmer’s decision to participate in crop insurance: A review

2019 ◽  
Vol 65 (No. 10) ◽  
pp. 481-489 ◽  
Author(s):  
Rizky Yanuarti ◽  
Joni Murti Mulyo Aji ◽  
Mohammad Rondhi
Keyword(s):  
Risk Aversion ◽  
Positive Impact ◽  
Insurance Premium ◽  
Point Of View ◽  
Rice Farming ◽  
High Input ◽  
Agricultural Insurance ◽  
The Government ◽  
High Level ◽  
Almost All

Agricultural insurance in Indonesia is focused specifically on rice farming and is locally known as Asuransi Usahatani Padi (AUTP). To encourage farmer participation, the government subsidises farmers’ cost of insurance (premium) by 80%. Despite high subsidy, AUTP is still unable to reach the coverage target. The objectives of this study are to investigate farmers’ Risk Aversion Level (RAL), its influence on farmers’ decision to participate in AUTP, and the effect of farmers’ participation in AUTP on their income. The result of this study can contribute to enriching agriculture insurance literature from the point of view of developing countries and catalyse other studies on this matter especially in Indonesia. The analysis methods used in this study were multiple pricelist designs and propensity score matching with a logistic regression model. 130 farmers were interviewed. The results showed that farmers tend to have a high level of risk aversion (82.3% of farmers insure almost all of their land). RAL has a significant effect on farmers’ decision to purchase AUTP (&lt; 0.01). A positive value of Average Treatment on the Treated (ATT) indicated that participation in AUTP has a positive impact on farmers’ income. AUTP is able to absorb production risks and encourage use of high input in farming.

scholarly journals Determining Agricultural Premium Insurance in Malang City using Black Scholes Model

2021 ◽  
Vol 2 (2) ◽  
pp. 80-87
Author(s):  
Herlia Widi ◽  
Dea Nisa Rahma Lani ◽  
Faridatul Hasanah
Keyword(s):  
Secondary Data ◽  
Insurance Premium ◽  
Rice Production ◽  
Strongly Correlated ◽  
Literature Study ◽  
Agricultural Insurance ◽  
Black Scholes Model ◽  
Black Scholes ◽  
Premium Price

This study examines the determination of rainfall-based agricultural insurance premium prices using the Black-Scholes model. The Black-Scholes model was originally used to determine the price of European-type options. The research method used is a literature study with secondary data collection. The data used in this study are rainfall data and rice production results in the city of Malang from 2015 to 2020. Based on the results and discussion, rainfall which is strongly correlated with rice production results is in quarter 2. The premium results obtained are different according to the desired percentile. In addition to percentiles, taking R_0 also affects the premium price. When R_0=322, the premium price tends to be cheaper than R_0=271.

scholarly journals Forecasting the Agricultural Risk Insurance System Parameters

2021 ◽  
Vol 110 ◽  
pp. 04010
Author(s):  
Mikhail Chernyakov ◽  
Maria Chernyakova ◽  
Irina Chernyakova ◽  
Sergey Gromov ◽  
Saidmukhtor S. Mokhtarzada
Keyword(s):  
Insurance Premium ◽  
Insurance Company ◽  
Agricultural Risk ◽  
Agricultural Insurance ◽  
Insurance System ◽  
Insurance Sector ◽  
Market Situation ◽  
The Many ◽  
Risk Parameters ◽  
Risk Insurance

The current insurance market situation is characterised by a high degree of instability. Many factors influence insurance company premiums, including the number of contracts, the claim repayment ratio, capital structure, underwriting profitability and risk. The insurance sector serves as a protective barrier for the country’s economy, defending it from various risks. At the same time, insurance company premiums are influenced by risks too. The number of research articles testifies to a stable interest in this problem. However, there is no technique for establishing the connection between the insurance premium and the many factors it is sensitive to. The article is devoted to the development of new models and, based on them, some digital technologies for forecasting agricultural insurance risk parameters. Based on a paradoxical theory of regulation and inno-diversification approach, an author’s model was developed for forecasting activity. It was used to do calculations of the main indicators of the agiructural risk insurance system. As a result, it became possible to trace the main patterns and tendencies in the development of the agricultural risk insurance system in Russia. Special attention was paid to the period after 2017 when it started to stabilise and recover after the crises as a consequence of nonoptimal managerial solution as refers to the inclusion of the agricultural risk insurance system in the “single subsidy”.

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