Impact of crop insurance on improving food security and agricultural investments: insights from India

Saurabh Bharne (), Pushpender Yadav (), Surendra Singh Jatav (), Sandeep Tripathi () and Hariom Tiwari ()
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Saurabh Bharne: Maulana Azad National Institute of Technology
Pushpender Yadav: Maulana Azad National Institute of Technology
Surendra Singh Jatav: Babasaheb Bhimrao Ambedkar University
Sandeep Tripathi: Maulana Azad National Institute of Technology
Hariom Tiwari: Maulana Azad National Institute of Technology

Mitigation and Adaptation Strategies for Global Change, 2025, vol. 30, issue 8, No 1, 21 pages

Abstract: Abstract Uncertain climate-related risks adversely affect agriculture and put a large chunk of the vulnerable population on the verge of food insecurity. Crop insurance has been a popular and effective tool for agricultural security by mitigating production risk and protecting livelihoods all across the world. This paper strives to estimate the impact of crop insurance on food security and agricultural investment in India by using nationally representative data of 39, 016 sample farmers collected from mainly rural India from July 2018 – June 2019. Further, Probit regression model and the Propensity Score Matching (PSM) methods are employed to investigate the determinants and treatment effects of crop insurance on food security. The study findings indicate that (i) crop insurance significantly improves food security and agricultural investments as the adopters’ average farm income and spending on household consumption and farm productive assets increase against the non-adopters, (ii) determinants of crop insurance indicate that age, education, landholding and farm inputs increase, whereas social marginalisation decreases farmers’ crop insurance participation, and (iii) agricultural training, membership in farmer organisations, and experience with crop loss also positively influence farmers’ decisions to adopt crop insurance. Further, based on the noted impediments, the study suggests that (i) increasing awareness and information about the availability of crop insurance programmes and targeted intervention for socially and economically marginalized farmers are critical for increasing the crop insurance adoption rate, (ii) the spread of crop insurance products can be enhanced by improving education, financial literacy and awareness about them, and (iii) membership of FPOs can be beneficial in encouraging them to insure their crops, as their trust and knowledge about crop insurance products will be increased with better peer interactions.

Keywords: Farm risk management; Household consumption; Probit regression; Propensity score matching; No poverty; Zero hunger (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11027-025-10256-3

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