Weather Induced Risks, Mitigation Strategies and Farmers’ Willingness to Participate in Flood Insurance Scheme in Punjab, Pakistan

Affordable insurance coverage remains a challenge in many economies demanding public-private support to mitigate disaster risks. The private sector can play an important role in creating public awareness to adopt financial protection against these risks. The lack of insurance penetration is common in developing countries and needs a careful innovative initiative in the agricultural sector specifically. Keeping in view the success of flood insurance schemes globally, it may be a viable option to help rural farmers during recurring catastrophic events in Pakistan. Present research study was conducted to evaluate weather-induced risks, farmers’ mitigation strategies and determining factors affecting the willingness of the farmers to adopt flood insurance schemes. The study used primary data randomly collected through a field survey from 240 farmers of three disaster-hit districts of Punjab during 2018-19. Binary regression was applied to estimate the results. The results of descriptive statistics show that most farmers (80%) consider floods a major weather-induced threat. At the farm level, money savings, diversified agriculture and keeping a high plinth of the house were among the main strategies to mitigate the risks of flood disasters. Factors like education level, off-farm earnings and involvement of farmers in other mitigation programs had a positive and significant contribution to enhancing willingness to participate in a flood insurance scheme. In contrast, higher land size, farmers relying on credit facilities, more contact with agriculture extension staff, and raised houses/plinth of the house were negatively affecting the adoption of flood insurance schemes. The findings can guide the agricultural policymakers and National Disaster Management Authorities towards improving their efforts to mitigate the negative impacts of floods and enhancing the willingness to adopt crop insurance schemes. These findings and measures can promote private insurance companies to propagate their initiatives for public welfare through the launch of insurance schemes more progressively.