Role of Socio-Economic Variables on Adoption of Crop Insurance Schemes

Abstract

The study examines the influence of the respondents’ socio-economic characteristics on their adoption of crop insurance schemes. Discriminant analysis based on the criteria values of standardized canonical coefficient, correlation matrix identified that educational level, farm size, satisfaction level, awareness and institutional source of credit were positive discriminators while negative coefficients were obtained for age, income level and number of earning members. Awareness about crop insurance scheme, satisfaction level of farmer respondent with respect to the insurance scheme and provision of credit wise institutional source were the highest discriminant variables. The study made it amply clear that socio-economic characteristics of farmers exert a significant influence on their adoption of crop insurance schemes. Taking into cognizance the findings of the discriminant analysis it can be concluded that awareness about the schemes and their benefits have to be created among the farmers in order to motivate them to go for insurance of their crops.

Keywords: Crop Insurance, Adoption, Discriminant function, Bihar

JEL Classification: O12, O13, Q13, Q14, Q18