FARMERS’ WILLINGNESSTO PAYFOR CROP INSURANCE CASE STUDY IN ARBA MINCH ZURIA WOREDA

Abstract

This paper uses a cross-sectional survey data of 379 randomly selected households in ArbaMinchZuriaworeda to determine the mean willingness to pay (WTP) of farmers for crop insurance. We used a technique of contingent valuation method to determine economic valuation and purposive sampling technique are used to select sample household in the area. Both primary and secondary data source were used from three kebeles (i.eGentakanchame,GentaBonke,and Kola Shara) in the study area it is applied statistical descriptive and Econometric probit regression model to analysis the data. Accordingly we got a result that income, age and education level significantly affect the household willingness to pay for crop insurancein the same direction with the change in covariate and household sex, irrigation usage and saving habits significantly affect the household willingness to pay for crop insurance in the opposite direction of change in the covariates. Finally,it is recommended that based on the analysis madethatEducation Level, Sex and saving habit of the household has big marginal effect so that awareness creation among stakeholders has to be focused on their relationship.