This study aims to investigate the factors that positivelyand negatively influence the farmer’s willingness to participate in cropinsurance and how much change in crop production due to have crop insurance. Thisstudy uses primary data collected from 160 farmers of Chitolmari upazila inBagerhat districts.
Probit model use to find out the major factors whichinfluence the willingness to participate in crop insurance. Besidesquantitative analysis is performed through estimating Translog ProductionFunction to evaluate the output, elasticity and marginal productivity of inputsin of crop production. Qualitative analysis is conducted by the help ofPrincipal Component Analysis and find out the farmer’s perception on cropinsurance schemes. This study finds that, if farmers have knowledge about cropinsurance schemes then there is a possibility to participate in crop insuranceand education level of the farmers also significant to participate in cropinsurance schemes. Education may create awareness about crop insurance’sbenefits. On the other hand most of the farmers think that high temperature andheavy rainfall are main weather associated risk which creates huge loss in cropproduction.
Farmers in this study area also think that crop insurance providesa good protection in their farming and their positive perception is to investin higher return in crop production. This paper also shows that the outputelasticity of seed is highest in relation to labor. Besides over use ofpesticide must decrease the production. Farmers who have insurance schemes butnot increase invest, they only carry the extra cost for insurance premium. Inanother context, if farmers increase investment in factor of production exceptpesticide, they get more output than before or insurance may encourage thefarmers to reinvest in crop production purpose even any damage occurs in lastyear.