Determinants of farmers demand for subsidized agricultural insurance in Poland

Abstract

Concerns about food security, price volatility along with an increase in frequent unfavourable weather phenomena creates the necessity to make greater efforts to protect and stabilize agricultural income and production capacity. Undoubtedly, one of the main activities is to popularize and increase farmers' access to insurance. Nevertheless, the decision to purchase agricultural insurance depends to a large extent on the characteristics of the farm, as well as the farmers themselves. The purpose of this article is to identify factors and assess role they play affecting the likelihood of farmers purchasing subsidized agricultural insurance. Data were collected in the region of Central Pomerania using a questionnaire. Identification of factors affecting the probability of purchasing subsidized agricultural insurance was made using the logit regression model. The base for the model was a set of independent variables obtained and based on a survey conducted in 2012 amongst owners or managers of an agricultural holding. The analysis showed that the decision to purchase subsidized agricultural insurance depended on the number of people permanently employed on the farm and on the occurrence of damage in the past. The research presented results which suggest that the probability of purchasing subsidized agricultural insurance increased as the number of people permanently employed on the farm grows, and that it is more than eleven times higher in the case of units that in the past suffered damage caused by natural disasters.