Abstract:
Crop insurance (CI) is an efficient risk management tool in agriculture which secures
the socio-economic situation of the farmers. The prime objective of the CI is to
protect farmers against the risk of crop failure through the process of indemnifying. It
contributes to self-reliance and self- respect among farmers and also helps to stabilize
farmers’ income, encourage farmers to adopt improved technologies and increase the
flow of credit to the farmers by reducing the risk for the credit agencies. The benefits
of CI are well-known, but there is a huge lack in voluntary participation of farmers in
the scheme. This study was aimed to assess farmers’ perception, awareness and
influential factors towards purchasing of a CI as well as to identify the way of revamp
crop insurance schemes in Sri Lanka. A randomly selected sample of 60 farmers both
insured and non-insured category in the Kurunegala district was used to collect the
data. The results show that the majority of the farmers are willing to join for CI and
satisfaction over the prevailing crop insurance schemes among farmers is very low.
Further, the results revealed, farmers’ satisfaction towards CI scheme, obtaining crop
loans, social participation of farmers and their affordability to premium rate positively
impact on their willingness towards CI while farmers’ capacity to manage with own
resource impact negatively. It is necessary to implement the awareness programs
about benefits and importance of CI to enhance the adoption of crop insurance
schemes in Sri Lanka.
