Factors Affecting Adoption of Wheat Insurance in Iran: A Case Study of Tehran Province

In this paper, effective factors on adoption of insurance among wheat producers were studied using logit analysis. The authors used survey methodology and multistage stratified sampling method during 2001-2002 cropping season to collect the required data. The sample size consisted of 240 wheat producers from Tehran province. The content validity of questionnaire was assessed by university professors, Ministry of Jihad for Agricultural experts and farmers in pilot stage. Factor analysis was applied to measure the validity of the following constructs: sustainable agriculture, socio-economic status and relationship with extension agent. The reliability of research items were evaluated by using Cronbach's alpha which was equal to 0.75. The results indicated that 58 percent of farmers did not have any interest in insuring their crop. There is a significant difference between the two groups of farmers, insured and uninsured, with respect to the following variables: farmer age, livestock ownership, socioeconomic status, yield per hectare, value of produced yield, total factor productivity, sustainability, and level of agricultural and economic development of villages. The result of logit analysis showed that farmer age, relationship with extension agents, livestock ownership, socioeconomic status, access to credits, land under wheat cultivation, land under general cultivation, and yield per hectare were the most important factors that affect wheat producers demand for insurance.