Agriculture Insurance as a Risk Management Strategy in Climate Change Scenario:

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1 Agriculture Insurance as a Risk Management Strategy in Climate Change Scenario: A study in Islamic Republic of Iran Kiyanoush Ghalavand Department of Gandhian Studies Panjab University India

2 Introduction Agriculture is central to the livelihoods of the rural poor. It is generally influenced by climate change. Accompanying changes are likely to be both global, as with rising sea levels attributable to ice-melt, and local, such as changes in rainfall patterns. Natural disasters hit hard. They may cause heavy losses to farmers and forest owners.

3 Agriculture production and farm incomes in Iran are frequently affected by natural disasters such as droughts, floods, cyclones, storms, landslides and earthquakes. Agricultural Insurance is a means of protecting the farmers against financial losses due to uncertainties that may arise agricultural losses arising from named or all unforeseen perils beyond their control.

4 Insurance can assist in managing these losses, and disaster insurance is that branch of this financial mechanism that is especially geared to covering losses from adverse weather and similar events beyond the control of growers.

5 Insurance can assist in managing these losses, and disaster insurance is that branch of this financial mechanism that is especially geared to covering losses from adverse weather and similar events beyond the control of growers.

6 Review Literature Rao, C.H.H., S. K. Ray and K. Subbarao, in their volume Unstable Agriculture and Droughts-Implications for Policy, (New Delhi, Vikas Publishing House Pvt. Ltd.1988)

7 Jodha, N. S., in his article, Role of Credit Farmers Adjustment Against Risk in Arid and Semi-Arid Tropical Areas of India (Economic and Political Weekly,1981.

8 Bhende, M. J., in his volume Agricultural Insurance in India: Problems and Prospects (National Bank for Agriculture and Rural Development Occasional, 2005.).

9 Research Methodology Wheat producer farmers who produce irrigated wheat crop in Khuzestan and Gorgan provinces were the statistical population of this study. Statistical population (wheat producer farmers) of northern Khuzestan were 1830 and statistical population of Gorgan were 3172 (Totally 5002 wheat producers). based on proportion of wheat producers' population in each Shahrestan, the sample size was determined according to Kucran sampling formula.

10 Statistical population and sample size according to proportional stratified random sampling Khuzestan Golestan Shahrestan Statistical population Sample size Shahrestan Statistical population Sample size Iezeh Gonbade Kavoos Shush Gorgan Shushtar Bandar e Torkaman Dezful Kordkooy Andimeshke Azad Shahr Masjed soleyman Agh Ghala Total Total

11 Education level Frequency Percent Literacy Primary school Secondary school High school Diploma and higher education Without any response 12 - Total

12 Results of multiple regression analysis to determining independent variables' influence on Drought crop insurance Adoption Independent variables B S.E.B Beta R 2 adjust R 2 change T Sig. Consult with other farmers Amount of contact with insurance agents Farmers awareness of goals and advantages of Drought crop insurance Each farmer's wheat crop area Dependent variable: Drought Crop insurance adoption F= Sig: Constant= 5.50 Y=2.41 X X X X

13 Extracted factors with their specification based on factor analysis Factors Special Amount (Eigen value) Variance Percent of S.A. Cumulative Frequency of Variance Percent First Second Third Fourth Fifth Sixth Seventh Eighth Ninth

14 Factorial Analysis 1. Extension-education factor 2. Economic Factor 3. Communication Channels Factor 4. Motivate Factor 5. Opinion Leadership Factor 6. Facility Factor 7. Confidential Factor 8. Supervision Factor 9. Diversity Factor

15 The insurance and disaster management industries are closely related -- both deal with the risk of natural disaster and managing the events following disasters. Climate change, although a natural phenomenon is accelerated by human activities.

16 Thank You