LIVESTOCK FARMERS RISK PERCEPTION AND WILLINGNESS TO PAY FOR LIVESTOCK INSURANCE IN FLOOD-PRONE AREAS OF PUNJAB

Abstract

Pakistan is the world’s most susceptible country to extreme climatic events, such as floods. As such, for many years, the country has faced the risk of losses from natural calamities without crop insurance. However, in recent years, the national government has undertaken crop insurance initiatives in Pakistan. Consequently, there is limited knowledge available on the adoption of crop insurance in Pakistan. To fill this gap, this study aims to examine the factors influencing the willingness to pay for livestock insurance in flood prone areas of Punjab. Primary data were collected from 204 farm households through a structured interview in flood-prone areas of Punjab. Data was analyzed with descriptive statistics and logistics models. The explanatory analysis was used to further look at the socio-economic characteristics of livestock farmers through MS Excel and binary logistics models to test the willingness to pay livestock farmers for insurance. The results show a positive relationship between the perceived risk of Farmers and the willingness to pay for insurance programs. The findings of this study show that the probability of farmers' WTP is increased due to a better understanding of financial institutions and having more technical knowledge. The study results show that farmers with adult males are more likely to pay livestock insurance.