Precaution Strategy of Moral Hazard Practice in Agricultural Insurance in Indonesia: An Approach of Soft Systems Methodology

Rahmat Fadhil, Muhammad Yasir Yusuf, T. Saiful Bahri, Hafiizh Maulana and Fakhrurrazi Fakhrurrazi

Economia Agraria y Recursos Naturales, vol. 21, issue 02

Abstract: [EN] This paper uses Soft Systems Methodology (SSM) to formulate strategies to prevent moral hazard acts in agricultural insurance in Indonesia. Agricultural insurance takes place, mainly, through Rice Crop Insurance and Cattle Insurance. Generally, the strategies that can be performed to minimize moral hazard practice in agricultural insurance programs are: Developing the capacity of human resources, improving field communication, enforcing penalties, institutional strengthening, and adding new products through Islamic agricultural insurance. Specifically, this paper proposes that the prevention of moral hazard practices can be done by implementing Islamic agricultural insurance systems with the concept of risk-sharing instead of risk transfer. [ES] Este trabajo utiliza Soft Systems Methodology (SSM) para formular estrategias para prevenir el riesgo moral en los seguros agrícolas en Indonesia. El Seguro de Cosecha de Arroz y el Seguro de Ganado son los más utilizados. Las estrategias son: desarrollo de la capacidad de los recursos humanos, mejora de la comunicación sobre el terreno, aplicación de sanciones, fortalecimiento institucional e incorporación de nuevos productos a través del seguro agrícola islámico. En concreto, se propone que la prevención del riesgo moral puede realizarse mediante sistemas de seguros agrícolas islámicos basados en el concepto de compartir el riesgo en lugar de transferirlo.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:earnsa:329147

DOI: 10.22004/ag.econ.329147

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