Asian Journal of Agricultural Extension, Economics &

Sociology

21(4): 1-7, 2017; Article no.AJAEES.37966

ISSN: 2320-7027

Factors Affecting Awareness Level of Farmers about

Crop Insurance: A Case Study of Haryana
Anju Duhan1* and Satbir Singh1
1
Research Scholar, Haryana School of Business, Guru Jambheshwar University of Science and
Technology, Hisar-125001, India.

Authors’ contributions

This work was carried out in collaboration between both authors. Both authors read and approved the
final manuscript.

Article Information

DOI: 10.9734/AJAEES/2017/37966
Editor(s):
(1) Ian McFarlane, School of Agriculture Policy and Development, University of Reading, UK.
Reviewers:
(1) John Walsh, Shinawatra University, Thailand.
(2) Javan Ngeywo, Kenya.
(3) Augrey Malambo, University of Zambia, Zambia.
Complete Peer review History: http://www.sciencedomain.org/review-history/22326

th
Received 4 November 2017
Accepted 13th December 2017
Original Research Article th
Published 16 December 2017

ABSTRACT

Dependency of Indian agriculture is still continuing on monsoon. The unpredictable and irregular
distribution of monsoon rains increases risk and uncertainty farmers. Spreading the risk is an
important aspect of decision making to farmers. For the improvement in the handling of perilous
outcomes across individuals, there is a need for contingent plans. So, to be aware and to
understand the importance of crop insurance and the related policies has become necessary for
the farmers of Haryana. We have tried to know the stage of their awareness about crop insurance
through this study. The main objective of the study is to trace out the awareness level of farmers
about crop insurance in Haryana and which are the main factor that affect their awareness level.
The present study finds that there are so many socio-economic factors which affect the knowledge
of farmers about crop insurance like age, education, sources of major income, category of farming,
income level and experience of farming. Education plays major role in understanding policies and
importance of insurance for the farmers. Both the government and the implementing agency in the
area should initiate awareness campaign in order to increase the level of farmers. Awareness
campaign should be conducted by the government from time to time at the village level to enhance
_____________________________________________________________________________________________________

*Corresponding author: E-mail: duhananju2010@gmail.com;

 Duhan and Singh; AJAEES, 21(4): 1-7, 2017; Article no.AJAEES.37966

the awareness level of farmers. The study suggests that the knowledge level of farmers about crop
insurance and its schemes can be increased by using different platforms of spreading awareness
through various educational efforts.

Keywords: Monsoon; risk; crop insurance; awareness; knowledge.

1. INTRODUCTION may occur in future and crop insurance is the

only instrument available to defend against
Now, Haryana has been transformed from a food production risk in agriculture. Therefore, this
lacking to a food surplus state due to better study was undertaken with the objective to
infrastructure facilities attached with agriculture illustrate out the knowledge of farmers about
research support and excellent addition network crop insurance and the related schemes.
to disseminate the information related to
improved farm practices to farmers of the state. 2. LITERATURE REVIEW
Haryana has become the second highest
contributor of food-grains to the central pool [1]. The leading occupation of the workforce of
Agriculture is an important economic activity for Haryana is agriculture and allied activities. The
the people in Haryana state. Most of the total state’s contribution is considerable in Green
population depends directly or indirectly on it. Revolution. At present, Haryana is known as
During recent past, agriculture in the state is major contributor in the production of grains and
decreasing in terms of arable land and crop milk in the country. A major proportion of the
production due to rising demand for land from population of the state is involved in farming. But,
other economic sectors, insufficient labor, farming is a very risky business today. Specially,
frequently affected by natural calamities, and the in developing countries, low productivity which is
increasing cost of agricultural inputs such as connected with high instability is the basic
seeds, fertilizers, pesticide and low market price. problem in ground of agriculture. In spite of
Therefore, there is the need for protecting scientific advancement, to fight with the
farmers from the various risks and hazards [2]. manmade or natural hazard, crop insurance is
Crop insurance is a tool aimed to mitigate the the best action which is gaining the position to
financial losses suffered by the farmers due to reduce the risk of farmers in farming. To bring
damage and destruction of their crops as a result insecurity in rural economy of the state, risk and
of various production risks [3]. To stabilize farm uncertainty are double dangers, which obstruct
income and to protect farmers against dreadful agricultural production. Insufficient and irregular
effect of losses due to natural hazards or low rainfall, hail-storm, attacks of pest and diseases
market prices, agriculture insurance is an etc. are the major risks and reason for
effective tool. After a bad farming year, crop considerable losses in agriculture. Farmer and
insurance also helps the farmers to commence nature are in opposite position in crop production
production activity. Through agriculture [6]. The farmers are making suicide attempts
insurance, crop losses can be spread over the because of the losses due to risks involved in
space and time which helps farmers to invest agriculture, selling their properties or their
more in agriculture [4]. For addressing the properties are seized by the bank and financial
issues related to crop losses and risks institutions for the loan availed by them. To cover
associated to the prices of crop produce, the risks which may occur in future and for
agriculture insurance is a key solution. It is maintaining constancy in farm income, the basic
important to learn the crash of crop insurance tool which is recognized is crop insurance. It
on farmers is of main importance because crop minimizes the problem of rural indebtedness,
insurance is still in its early stage in India. A risk which is traceable to the frequent failure of crops
management tool and a risk transfer device, on and also provides protection to farmers against
which the farmers can depend in the event of losses caused by crop failure and thereby
crop failure, can be defined as crop insurance ensures stability in farm income. It also reduces,
[5]. Due to flexibility in monsoon, Indian to some extent, government expenditure incurred
agriculture has to face various risks during the on relief measures extended to meet the havoc
cropping period of different crops. Natural caused by natural calamities. By protecting the
disasters may occur due to the abnormal economic interest of the farmers against possible
behavior of the monsoon in India. So, there is risk or loss, it accelerates the adaptation of new
need to some provisions to wrap the risk which agricultural practices. For increasing the

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 Duhan and Singh; AJAEES, 21(4): 1-7, 2017; Article no.AJAEES.37966

awareness among farmers, the attitude of The study also gives suggestions that may be
farmers is need to be changed, so that the helpful to increase the awareness level of the
farmers could understand that the premium sum farmers about crop insurance.
paid by the farmers is not a burden but an
investment for them in the event of loss of crop. 4. RESULTS AND DISCUSSION
Social participation and education will increase
the awareness of the farmers [7]. Lack of The collected data is analyzed to explore the
awareness among farmers about the risk knowledge level of farmers about crop insurance
management techniques is the main reason and schemes related to crop insurance. The
behind it. So, it is very important to study about existing literature pointed out the number of
various aspects of crop insurance. The factors which influence the awareness level of
government should give more stress to review farmers towards crop insurance and the level of
the existing crop insurance schemes and should understanding the importance of it. After giving
reframe them in such a way, that farmers could critical thinking the study identified major factors
be self motivated to participate in the agriculture such as age of the respondents, educational
insurance programmes [8]. Adequate awareness qualifications, sources of their major income,
should raised among the farming community income group of the respondents, category of
which will leads to insurance education of the farming and experience of farming to trace the
farmers and will facilitate them to decide awareness level of farmers towards significance
regarding the various risk managing tools. To of crop insurance. The awareness level is
sensitize the farmers, efforts should be made by proxied by past status of farmers about crop
agricultural universities and the state department insurance, whether they have availed the crop
of agriculture which may act as a risk insurance or not or they would like to or not going
management tool under adverse conditions [9]. to purchase crop insurance. The proportions of
responses sharing the agreement with
3. RESEARCH METHODOLOGY statements have computed for all data set and
also for different categories classified on the
The present study is exploratory in nature, which basis of above reference factors.
is based on primary data. For recording the data,
a well structured questionnaire was developed The Table 1 depicts the demographic details of
and administered on the sampled farmers. The the sampled farmers. Age of the famers, literacy
questionnaire was administered on farmers level and their educational qualifications have
randomly selected from all over in Haryana. Data described in this table. The data given in the
obtained through structured questionnaire was table states that highest number of the farmers
analyzed using simple statistical tools such as belonged to the age group of 45-55 (26.5%)
percentage and calculating factor score of followed by the age group of 35-35 (25.9%) and
awareness. Eight statements have used as 25-35 (24.5%). The age group of 18-25 has the
indicators to construct the crop insurance lowest percentage of the farmers (6.5%). 16.6%
awareness by using data reduction technique. farmers belonged to the age group of 55 and
The variables involved in indicators were above. If we talk about the literacy level of the
measured on binary scale, so the conventional respondents, it was found that out of the total
factor analysis technique was not applicable for 567 respondents, 509 were the literate
such type of cases. The determinative technique respondents and 58 were illiterate. The figures
that is used for data reduction in case of further indicate that the maximum number of
categorized variable was utilized which is also farmers were metric (35.0%) followed by below
known as Latent Trait Model. Instead of metric (29.7%) and senior secondary (19.4%).
explaining the factors among statements / The minimum numbers of farmers was post
indicators, the technique is utilized for graduate (4.3%) among the total farmers. The
constructing the index of crop insurance percentage of graduate farmers was 11.6%.
awareness. The present paper has reported the
results of a survey of 567 farmers from all over 4.1 Indicators of Awareness
the Haryana state conducted to assess their
attitude and knowledge about different facets of The precondition to the acceptability and the
crop insurance and its schemes to analyze the success of crop insurance schemes lies in
factors affecting knowledge and awareness increasing awareness amongst farmers about
among the farmers. The paper further examines these schemes launched by the government.
the attitude of farmers towards crop insurance. There is also an urgent need to educate the

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 Duhan and Singh; AJAEES, 21(4): 1-7, 2017; Article no.AJAEES.37966

farmers about financial products to create farmers and responses were recorded through
awareness among them. To trace out the interviews. The above table list to assess the
awareness among farmers we have utilized awareness among farmers in Haryana. The
the following indicators. These indicators are figures in the table state that 59.6% farmers had
used to record the responses in the presence an idea about crop insurance while, 15.3%
and absence of the situation in terms of yes and respondents knew about the implementation crop
no. insurance schemes in Haryana. It is surprising
that 0.9% sampled farmers are having crop
To stabiles the income and mitigate the risk in insurance against 30.9% in the past. However
agriculture, the government has also launched there is inclination among farmers toward
different crop insurance schemes for different insurance scheme as 72.5% respondents were
period. To know how farmers can assess crop ready to purchase crop insurance in future if they
insurance, I have used the indicators given in the would be offered. 61.4% farmers wanted to be
Table 2. These indicators are the part of aware of the necessary components of the
questionnaire which is administered on the schemes under their crops would be insured.

Table 1. Demographic profile of the respondents

Variable Frequency Percentage

Age
18-25 37 6.5
25-35 139 24.5
35-45 147 25.9
45-55 150 26.5
55 and above 94 16.6
Total 567 100.0
Literacy
Illiterate 58 10.2
Literate 509 89.8
Total 567 100.0
Educational qualifications
Below Metric 151 29.7
Metric 178 35.0
Senior Secondary 99 19.4
Graduate 59 11.6
Post-graduate 22 4.3
Total 509 100.0
Source: Primary data

Table 2. Indicators of awareness

S. no. Indicators Awareness level (%)

1. Heard about crop insurance 59.6
2. Knowledge your crops could be insured 54.7
3. Relevance of crop insurance 54.0
4. Knowledge about crop insurance schemes 15.3
5. Availed crop insurance in past 30.9
6. Availing any type of crop insurance at present 0.9
7. Willingness to go for crop insurance 72.5
8. Inclination to understand the key components of crop insurance 61.4
scheme before going for it
Source: Primary data

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 Duhan and Singh; AJAEES, 21(4): 1-7, 2017; Article no.AJAEES.37966

Generally, age is considered as one of the about the crop insurance in Haryana. Thus, we
factors which affects the level of maturity and can say that education and awareness level are
maturity level supports the rationality in decision highly correlated.
making capacity of the farmers. Many
researchers have the view that age plays an Table 5. Sources of major income and
important role in the adoption of innovations and awareness level
related information and were believed to be
positively correlated with age. Younger farmers Sources Awareness
are known to be less resistant to change than the level (Mean)
old farmers and they accept and adopt Agriculture 2.77
innovations and new technologies readily and Livestock 1.40
quickly as stated by [10] and [11]. Table 3 Both (agriculture and livestock) 2.90
depicts that age group of farmer’s affects its level Non-agriculture 2.13
of awareness about crop insurance. On the basis Agriculture + non-agriculture 4.24
of average score, it was found that the age group All of theses 4.56
of 35-45 was most aware group of farmers (3.11) Source: Primary data
followed by group 25-35 (2.98), 45-55 (2.93) and
18-25 (2.48). The age group of 55 and above The Table 5 explains the awareness level of
was least aware about crop insurance (2.42). It respondents with different sources of their major
can be concluded from the data that young income. It can be clearly observed from the data
generation is more conscious towards that farmers whose source of major income was
information sources. Another reason may be the livestock were less aware (1.40) about crop
education that affects a lot. The respondents with insurance followed by non-agriculture (2.13). The
the age group of 55 and above were not so much reason was that they were not directly involved in
educated and that’s why they were not so aware agriculture. The awareness level of farmers
about crop insurance. whose major source of income was agriculture
was (2.77) and with non- agriculture was (2.13).
Table 3. Age and awareness level The awareness level of the farmers having
agriculture and non-agriculture as the source of
Age Awareness level (Mean) major income was 4.24. Further, it was
18-25 2.48 concluded that the respondent having different
25-35 2.98 sources of income along with agriculture were
35-45 3.11 most aware about crop insurance (4.56).
45-55 2.93
55 and above 2.42 Table 6. Income group and awareness level
Source: Primary data
Income Awareness level (Mean)
Table 4. Education and awareness level Up to 1 lac 1.86
1-2 lacs 2.82
Education Awareness level (Mean) 2-3 lacs 3.62
Below Matric 2.43 3-4 lacs 3.57
Matric 2.46 4-5 lacs 3.36
Senior secondary 3.05 Above 5 lacs 4.64
Graduate 4.73 Source: Primary data
Post-graduate 5.70
Source: Primary data Table 6 states that the farmers with highest
income group of above 5 lacs had the highest
It is concluded from Table 4 that education and awareness level (4.64) followed by 2-3 lacs
awareness level are positively related with each (3.62), 3-4 lacs (3.57), 4-5 (3.36) and 1-2 (2.82).
other. It can be clearly observed from the data The lowest income group, up to 1 lac was the
given in the table that with the increase in least aware group (1.86) about crop insurance.
education, awareness level of farmers also The large farmers having income of more than 5
increases. The post-graduate farmers had the lacs were more conscious about their agricultural
highest mean (5.70) followed by the graduates risks because they had also capacity to spend
(4.73). Senior secondary (3.05) respondents money for risk management that’s why it was the
were more aware than Matric farmers (2.46). highest aware group. Respondents with income
Below matric respondents were least aware group up to 1 lac were marginal or landless

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 Duhan and Singh; AJAEES, 21(4): 1-7, 2017; Article no.AJAEES.37966

farmers having less paying capacity for crop of farmers’ increasing consciousness towards
insurance, therefore; they were not so concerned crop insurance. 72.5% respondents are ready to
about it. purchase crop insurance in future if they would
offer. 61.4% farmers want to know about the
Table 7. Category of farming and awareness necessary components of the schemes under
level their crops would be insured. Young generation
is more conscious towards information sources.
Category Awareness level (Mean) The reason may be the education that affects a
Marginal farmers 1.71 lot. Education and awareness level are highly
Small farmers 2.76 correlated. As well as education is the main
Large farmers 3.52 factor, which affects awareness level but maturity
Landless farmers 1.30 level of respondents could not be ignored.
Source: Primary data Educational qualification affects directly to the
awareness. The maximum numbers of farmers
The data in the Table 7 explains the category of who are highly qualified belong to the more
respondents and their awareness level about aware class. Different sources of major income
crop insurance. The data revealed that the large have an effect on their awareness about crop
farmers were more conscious about their crop insurance. Agriculture is considered as main
losses as compared to small farmers. Awareness occupation of farmers in Haryana. Service and
mean of large farmers was highest (3.52) business (other than agri-business) class was
followed by the small farmers (2.76) and not so much concerned about crop insurance. In
marginal farmers (1.71). The landless farmers large income group, number of farmers was less
were least aware (1.30) about crop insurance. but awareness among them was more and in
small income group numbers of famers were
Table 8. Experience of farming and more but awareness among them was less. The
awareness level reason may be other sources of income,
education and maturity level of respondents.
Experience Awareness level (Mean) With the education, experience also matters a lot
0-5 years 1.96 in increasing awareness. Respondents who are
5-10 years 2.87 involved in agriculture and related activities are
10-15 years 2.83 more concerned about crop insurance and those
Above 15 years 2.97 who earn major income from other sources are
Source: Primary data not so aware about it.

The figures given in the Table 8 indicate that how 5. CONCLUSION

experience affects the awareness level of the
respondents. The farmers having experience of The present study finds that awareness level of
5-10 years with awareness mean (2.87) and 10- farmers was very low towards crop insurance
15 years (2.83) were less aware in comparison to schemes. This problem has also highlighted in
the farmers with maximum experience of more the literature. Both the government and the
than 15 years. Here, the biggest reason for that implementing agency in the area should initiate
was only and only education. Maximum numbers awareness campaign in order to increase the
of highly experienced farmers were below matric level of farmers. Awareness campaign should be
and matric, that’s why their awareness level was conducted by the government from time to time
low. So, the conclusion is that education plays a at the village level to enhance the awareness
major role in increasing the awareness level of level of farmers. The study suggests that the
the farmers. knowledge level of farmers about crop insurance
and its schemes can be increased by using
4.2 Discussion different platforms of spreading awareness
through various educational efforts. The main
The data state that 59.6% farmers have an idea limitation of the study was the studied area i.e.
about crop insurance. Only 15.3% respondents only Haryana, because the whole economy of
know about the implementing crop insurance the country is known as agricultural economy.
schemes in Haryana. It is very surprising that Therefore, this kind of studies is most relevant for
30.9% farmers have availed crop insurance in all the farmers from the entire country to spread
the past but, 0.9% sampled farmers are availing out the important information regarding crop
at present. But the data also gives a positive sign insurance.

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 Duhan and Singh; AJAEES, 21(4): 1-7, 2017; Article no.AJAEES.37966

COMPETING INTERESTS agricultural insurance scheme in risk

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