Psychology behind the low penetration of crop insurance: Satellite remote sensing to the aid

Posted on Posted in Crop insurance, News, Satellite Remote Sensing

Factors like the natural disaster (flood, drought, earthquake), climate variability (hail storming, heavy rainfall), pest’s attack, scarcity of water, inundations, financial aid etc. puts agriculture at risk. These factors lead to the apprehension of stress that may resist a farmer’s ability to take decisions for any sort of long-term crop management investment. Having had experience of the shifting pattern of rainfall (very low or heavy) leading to harvest losses or such knowledge through others experiences makes a farmer less likely to take any risk of investing in agriculture. Also, the farmer may develop a negative attitude towards crop insurance and could not make appropriate decisions about what is good or bad, or what option to choose out of many alternatives. A study by Boyd et al. (2011)1 showed that, the amount of risk taken by farmer show a positive relationship with the attitude to purchase crop insurance.

Agriculture being influenced by several factors varying from farm to farm requires information tailored to the local scale. Survey of farmers in Illinois, Iowa, and Indiana, their findings discovered farm size, age, level of debt, and yield risk are positively linked with participation in the insurance program and with demand for revenue insurance (Aziz, Aziz, Aris & Aziz, 2015)2. It is either personal evaluation or social influence i.e. important in performing behaviour according to Theory of Reasoned Action (Fishbein & Ajzen, 1967)3.

It is high time that farmers should be facilitated to identify the frequency and severity of the risk so that they can personally evaluate and their decisions can be mended for their good in terms of improving crop yield and quality. Aapah innovations private limited is one such body/entity that may help farmers in forming positive attitude towards outcome. Aapah innovations ensure to provide cutting edge information directly garnered to the farmers through integrated modern technologies such as Satellite Remote Sensing. Aapah Innovations, through its expertise, may also help banks in simulating crop risks under different climatic conditions. For a stable growth of the agriculture sector, subjective norms also need to be established to engage even marginal farmers in a specific behaviour. At the policy level, the government always emphasises in the budget to include advanced technologies that could increase the penetration of crop insurance and provide help to the farmers in reducing their losses in agriculture due to natural disasters.  Pradhan Mantri Fasal Bima Yojna (PMFY) and Weather Based Crop Insurance Scheme (WBCIS) are such plans by the current govt. Policies like these will be helpful to provide financial support to the farmers thence creating public opinion, especially for the small marginal farmers.



  1. Boyd, M., Pai, J., Zhang, Q., Holly Wang, H., & Wang, K. (2011). Factors affecting crop insurance purchases in China: the Inner Mongolia region. China Agricultural Economic Review,3(4), 441-450.
  1. Aziz, N. A. B. A., Aziz, N. N. B. A., Aris, Y. B. W., & Aziz, N. A. B. A. (2015). Factors influencing the paddy farmers’ intention to participate in agriculture Takaful. Procedia Economics and Finance,31, 237-242.
  1. Fishbein, M. & Ajzen, I. (1975). Belief, attitude, intention and behavior: An introduction to theory and research. Reading, MA: Addison-Wesley.