Journal of Crop Production and Processing

The main objective of the present study is to analyze the effects of agricultural crop insurance on farmers’ technical efficiency and risk attitude. Required data came from questionnaires that were completed by the Institute for Planning and Agricultural Economics of the Ministry of Agriculture. Farmers’ technical efficiency and attitude toward risk were estimated using stochastic frontier production function and equally likely certainty equivalent method for both insured and non-insured groups. Results revealed that effects of agricultural insurance on farmers’ technical efficiency were significantly positive in the three study regions.

Results of estimating risk aversion coefficients of study farmers showed a positive effect of insurance on risk aversion coefficients. However, this effect was significant only in two of the climatic regions under study.