Willingness to pay for crop insurance in Jammu and Kashmir

In Kharif season 2016, The Indian government introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY), a new crop insurance scheme to provide substantial financial support and coverage to the country’s farmers in the case of crop failure and ensure credit flow to the agriculture industry. Enrolments in this program will be entirely voluntary beginning in 2021. As a basis, this research was carried out in the Jammu region of Jammu and Kashmir to determine the farmers’ Willingness to Pay (WTP) for crop insurance. Primary data were collected using a face-to-face survey questionnaire, and the Stated Preference method was used to draw farmers’ WTP for crop insurance. The double Bounded Dichotomous Choice (DBDC) method evaluated the WTP. Results of the study revealed that the awareness about crop insurance (79.16%) was high in the study area. However, knowledge about this scheme’s modalities and components was much less among the farmers. Overall, 66 (57.50%) of farmers out of 120 sampled farmers showed a willingness to join PMFBY in the upcoming seasons, out of which 51 farmers (77.27%) were those who have received compensation in the past. Estimation of DBDC model for paddy resulted in the mean WTP Rs. 873 per hectare. DBDC model for wheat resulted in a mean WTP of Rs. 846 per hectare. This study concludes that farmers were unaware of the modalities and components of the scheme, and coverage of this crop insurance scheme is limited. To sustain this scheme, awareness about PMFBY needs to be extended further. Estimated results of the DBDC model suggest that experience in farming, total operational land holding, family size of farmers, and whether they received compensation in the past have a significant impact on their willingness to pay for crop insurance.