A Case Study about the Role of Insurance in Khoy Poultry Production Industry

Risk and uncertainty in agricultural activities are being considered by agricultural producers as main obstacle in adopting new technologies and also mentioned as a hinder for the new agricultural investment. Risk management is important and should be taken into account since uncertainty is inherent in the price and production as well as income of the farmers. In this paper, we study the role of insurance in mitigating and transferring risk and also as one of strategies of risk management in poultry production. In this direction, the required information is gathered by questionnaire from 41 poultry farms in Khoy area, among the insured and non-insured farmers, for the first period of the chicken production in 1388. By concentrating on the performance of the two groups of insured and non-insured farmers, we compare the average number of the labour force in both groups, the age and the number of the farmer's family in both groups and finally we compare the social and individual characteristics of the farmers for both groups. The comparison for the aforementioned characteristics between both groups show that there is no significant difference between insured and non-insured farms. However, we show that the average years of being in the poultry industry is longer for the insured farmers. Moreover, our quantitative analysis based on the estimation of the production function reveals that insurance does not have any significant impact on the poultry production in Khoy area.