Interaction between crop insurance and technology adoption decisions: The case of wheat farmers in Chile

This paper examines relationships between crop insurance and input technology decisions among Chilean wheat farmers

César Salazar; Marcela Jaime; Cristián Pinto; Andrés Acuña

2019

Scholarcy highlights

  • Agricultural production is frequently exposed to a variety of risks, including climatic sanitary, geological, market, and man-made risks
  • Bivariate probit models report a correlation coefficient informing on the interrelation between the insurance and technology decisions
  • Improvements in climate risk management by the adoption of modern technology and crop insurance are likely to become essential in order to reduce the vulnerability of agriculture in the future
  • This paper examined the determinants of participation in the Chilean crop insurance program, with an emphasis on the interactions that emerge with technology adoption decisions
  • We found that relationships between insurance and technology decisions are strong and significant among family farmers, but not among large-scale farmers
  • The estimations of the bivariate probit model suggest that, whereas modern irrigation decisions are related to insurance participation, certified seed and biological control adoption are more likely to be independent of insurance decisions
  • Our results suggest that policy interventions through extension and education programs providing insurance-related information are necessary to induce faster adoption and diffusion of the crop insurance among farmers

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