Factors affecting the use of forage insurance
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Date
2018
Authors
Roznik, Mitchell
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Abstract
The objective of this study is to examine factors affecting the use of three government administered risk management programs: forage index insurance, crop insurance, and AgriStability. Survey data is from 87 beef and forage producers in Saskatchewan and Alberta, and probit regression models are used for the analysis. Results indicate that producers’ who use more forage index insurance are younger, maintain less forage inventory, have greater perceived weather risk, and have higher levels of insurance knowledge. Results suggest that producers who use more crop insurance have a higher proportion of rented farmland, a smaller share of off-farm household income, and higher levels of insurance knowledge. Lastly, producers that use the AgriStability program more have larger farms, smaller households, have experienced a large previous farm loss, and have purchased forage insurance regularly in the past. This analysis should provide policy makers with useful information regarding forage producers’ risk management decisions.
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Keywords
Forage Insurance, Index Insurance, Crop Insurance, AgriStability, Willingness to Pay, Probit Model, Survey