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Land Suitability and Insurance Premiums: A GIS-based Multicriteria Analysis Approach for Sustainable Rice Production

Md Monjurul Islam (), Tofael Ahamed () and Ryozo Noguchi ()
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Md Monjurul Islam: Graduate School of Life and Environmental Sciences, University of Tsukuba, Tsukuba 305-8572, Japan
Tofael Ahamed: Faculty of Life and Environmental Sciences, University of Tsukuba, Tsukuba 305-8572, Japan
Ryozo Noguchi: Faculty of Life and Environmental Sciences, University of Tsukuba, Tsukuba 305-8572, Japan

Sustainability, 2018, vol. 10, issue 6, 1-28

Abstract: The purpose of this research is to develop a land suitability model for rice production based on suitability levels and to propose insurance premiums to obtain maximum returns based on the harvest index and subsidy dependence factor for the marginal and moderately suitable lands in the northern part of Bangladesh. A multicriteria analysis was undertaken and a rice land suitability map was developed using geographical information system and analytical hierarchy process. The analysis identified that 22.74% of the area was highly suitable, while 14.86% was marginally suitable, and 28.54% was moderately suitable for rice production. However, 32.67% of the area, which was occupied by water bodies, rivers, forests, and settlements, is permanently not suitable; 1.19% is presently not suitable. To motivate low-quality land owners to produce rice, there is no alternative but to provide protection through crop insurance. We suggest producing rice up to marginally suitable lands to obtain support from insurance. The minimum coverage is marginal coverage (70%) to cover the production costs, while the maximum coverage is high coverage (90%) to enable a maximum return. This new crop insurance model, based on land suitability can be a rational support for owners of different quality land to increase production.

Keywords: land suitability; agricultural crop insurance; AHP and GIS (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:gam:jsusta:v:10:y:2018:i:6:p:1759-:d:149227