IDEAS home Printed from https://ideas.repec.org/a/spr/masfgc/v30y2025i3d10.1007_s11027-025-10205-0.html
   My bibliography  Save this article

Farmers’ preference for crop-diversification in India: does crop-insurance play a part?

Author

Listed:
  • Dinamani Biswal

    (National Institute of Technology Silchar)

  • Chandra Sekhar Bahinipati

    (Indian Institute of Technology Tirupati)

Abstract

Farmers face yield risks due to various factors, including climate change and extreme events, and it is being advocated to adopt climate-smart agriculture practices, including crop diversification and crop insurance. While both options provide numerous benefits, the adoption rate is observed as low, and thus, several studies identified determinants separately. These options could substitute or complement each other, and higher benefits could be derived from adopting them together. However, a dearth of studies examine the causal association among climate-smart agriculture strategies. This study addresses this gap, i.e., investigates to what extent crop insurance acts as an instrument for the diversification of crops so policies can be designed to promote combined options. This study employs logit and ordered logit models by taking the 70th (2012–13) and 77th (2018–19) rounds of the National Sample Survey Office dataset. The following observations are reported: (i) the adoption of crop diversification has declined from 49% in the kharif season of 2012–13 to 38% in the same season in 2018–19, and a similar result is also reported for several states; (ii) in particular, the adoption rate has plummeted among the smallholders; (iii) as expected, crop insurance is noticed as one of the major instruments; (iv) other determinants are household size, land size, irrigation facility, and access to various government policies such as access to Mahatma Gandhi national rural employment Guarantee scheme, and soil health card, and access to input dealer, and radio and television; (v) surprisingly, access to agricultural extension and awareness of minimum support price have negative effects. In terms of policy recommendations, this study advocates designing policies to promote a bundle of options, e.g., low insurance premium rates for farmers who opt for crop diversification. Further, it is suggested that agricultural extension services be restructured, minimum support prices be announced, and the market for various agricultural outputs be fostered. Such assessments are imperative as increasing the adoption of climate-smart agriculture options is one of the most important priorities in the current policy arena.

Suggested Citation

  • Dinamani Biswal & Chandra Sekhar Bahinipati, 2025. "Farmers’ preference for crop-diversification in India: does crop-insurance play a part?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 30(3), pages 1-33, March.
  • Handle: RePEc:spr:masfgc:v:30:y:2025:i:3:d:10.1007_s11027-025-10205-0
    DOI: 10.1007/s11027-025-10205-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11027-025-10205-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s11027-025-10205-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Singh, Gurpreet & Gandhi, Vasant P. & Jain, Dinesh, 2024. "Micro-irrigation adoption and the Jevons’ Paradox: A study from four states of India," Agricultural Water Management, Elsevier, vol. 303(C).
    2. Kibrom T. Sibhatu & Matin Qaim, 2018. "Farm production diversity and dietary quality: linkages and measurement issues," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(1), pages 47-59, February.
    3. Ananya Ajatasatru & Vishnu Prabhu & Barun Deb Pal & Kakali Mukhopadhyay, 2024. "Economy-wide impact of climate smart agriculture in India: a SAM framework," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 13(1), pages 1-30, December.
    4. Nagarajan, Latha & Smale, Melinda & Glewwe, Paul, 2005. "Local Seed Markets and the Determinants of Crop Variety Diversity in Marginal Environments: The Case of Millet in Semi-Arid India," 2005 Annual meeting, July 24-27, Providence, RI 19445, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Jisang Yu & Daniel A. Sumner, 2018. "Effects of subsidized crop insurance on crop choices," Agricultural Economics, International Association of Agricultural Economists, vol. 49(4), pages 533-545, July.
    6. Ahmed Mushfiq Mobarak & Mark R. Rosenzweig, 2013. "Informal Risk Sharing, Index Insurance, and Risk Taking in Developing Countries," American Economic Review, American Economic Association, vol. 103(3), pages 375-380, May.
    7. Anubhab Pattanayak & K. S. Kavi Kumar & Lavanya R. Anneboina, 2021. "Distributional impacts of climate change on agricultural total factor productivity in India," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 26(2), pages 381-401, April.
    8. Dinamani Biswal & Chandra Sekhar Bahinipati, 2025. "Crop-insurance adoption and impact on farm households’ well-being in India: evidence from a panel study," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 30(1), pages 19-38, January.
    9. Kumar, S. & Gupta, S., 2015. "Crop Diversification towards High-value Crops in India: A State Level Empirical Analysis," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 28(2).
    10. Abdul Razak Baba & Abdul-Malik Abdulai, 2021. "Determinants of Crop Diversification and Its Effects on Household Food Security in Northern Ghana," Arthaniti: Journal of Economic Theory and Practice, , vol. 20(2), pages 227-245, December.
    11. Quaas, Martin F. & Baumgärtner, Stefan, 2008. "Natural vs. financial insurance in the management of public-good ecosystems," Ecological Economics, Elsevier, vol. 65(2), pages 397-406, April.
    12. Di Falco, Salvatore & Perrings, Charles, 2005. "Crop biodiversity, risk management and the implications of agricultural assistance," Ecological Economics, Elsevier, vol. 55(4), pages 459-466, December.
    13. Suresh, A. & Praveen, K.V. & Reddy, A. Amarender & Singh, D.R., 2017. "Risks in Rainfed Agriculture and Farmers’ Adaptation Practices: A Case of Cotton Farmers of Maharashtra," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 72(3), September.
    14. Joseph Oscar Akotey & Charles K. D. Adjasi, 2018. "Microinsurance And Consumption Smoothing Among Low-Income Households In Ghana," Journal of Developing Areas, Tennessee State University, College of Business, vol. 52(4), pages 151-165, October-D.
    15. Hailemariam Teklewold & Menale Kassie & Bekele Shiferaw, 2013. "Adoption of Multiple Sustainable Agricultural Practices in Rural Ethiopia," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 597-623, September.
    16. Itishree Pattnaik & Kuntala Lahiri-Dutt & Stewart Lockie & Bill Pritchard, 2018. "The feminization of agriculture or the feminization of agrarian distress? Tracking the trajectory of women in agriculture in India," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 23(1), pages 138-155, January.
    17. Pratap S. Birthal & Jaweriah Hazrana & Digvijay S. Negi, 2021. "Effectiveness of Farmers’ Risk Management Strategies in Smallholder Agriculture: Evidence from India," Climatic Change, Springer, vol. 169(3), pages 1-35, December.
    18. Birthal, Pratap S. & Hazrana, Jaweriah, 2019. "Crop diversification and resilience of agriculture to climatic shocks: Evidence from India," Agricultural Systems, Elsevier, vol. 173(C), pages 345-354.
    19. Jisang Yu & Aaron Smith & Daniel A Sumner, 2018. "Effects of Crop Insurance Premium Subsidies on Crop Acreage," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 91-114.
    20. Jeetendra Prakash Aryal & Dil Bahadur Rahut & Sofina Maharjan & Olaf Erenstein, 2018. "Factors affecting the adoption of multiple climate‐smart agricultural practices in the Indo‐Gangetic Plains of India," Natural Resources Forum, Blackwell Publishing, vol. 42(3), pages 141-158, August.
    21. Salvatore Di Falco & Felice Adinolfi & Martina Bozzola & Fabian Capitanio, 2014. "Crop Insurance as a Strategy for Adapting to Climate Change," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 485-504, June.
    22. Mandal, Raju & Bezbaruah, M.P., 2013. "Diversification of Cropping Pattern: Its Determinants and Role in Flood Affected Agriculture of Assam Plains," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 68(2), pages 1-13.
    23. Chandra Sekhar Bahinipati & Vijay Kumar & P. K. Viswanathan, 2021. "An evidence-based systematic review on farmers’ adaptation strategies in India," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(2), pages 399-418, April.
    24. Rose Nankya & John W. Mulumba & Francesco Caracciolo & Maria Raimondo & Francesca Schiavello & Elisabetta Gotor & Enoch Kikulwe & Devra I. Jarvis, 2017. "Yield Perceptions, Determinants and Adoption Impact of on Farm Varietal Mixtures for Common Bean and Banana in Uganda," Sustainability, MDPI, vol. 9(8), pages 1-15, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kamel Louhichi & Daël Merisier, 2024. "Potential impacts of the Common Agricultural Policy's Income Stabilisation Tool on farmers' incomes and crop diversity: A French case study," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(2), pages 716-739, June.
    2. Charlotte Fabri & Sam Vermeulen & Steven Van Passel & Sergei Schaub, 2024. "Crop diversification and the effect of weather shocks on Italian farmers' income and income risk," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(3), pages 955-980, September.
    3. Kamel Louhichi & Daël Merisier, 2023. "Potential impacts of the Income Stabilisation Tool on farmers' income and crop diversity: a French case study [Impacts potentiels de l'outil de stabilisation des revenus sur les revenus des agricul," Post-Print hal-04195630, HAL.
    4. Eder, Andreas & Salhofer, Klaus & Quddoos, Abdul, 2024. "The impact of cereal crop diversification on farm labor productivity under changing climatic conditions," Ecological Economics, Elsevier, vol. 223(C).
    5. Asfaw, Solomon & Pallante, Giacomo & Palma, Alessandro, 2020. "Distributional impacts of soil erosion on agricultural productivity and welfare in Malawi," Ecological Economics, Elsevier, vol. 177(C).
    6. Quentin Stoeffler & Michael Carter & Catherine Guirkinger & Wouter Gelade, 2022. "The Spillover Impact of Index Insurance on Agricultural Investment by Cotton Farmers in Burkina Faso," The World Bank Economic Review, World Bank, vol. 36(1), pages 114-140.
    7. F. G. Santeramo & B. K. Goodwin & F. Adinolfi & F. Capitanio, 2016. "Farmer Participation, Entry and Exit Decisions in the Italian Crop Insurance Programme," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 639-657, September.
    8. Azzam, Azzeddine & Walters, Cory & Kaus, Taylor, 2021. "Does subsidized crop insurance affect farm industry structure? Lessons from the U.S," Journal of Policy Modeling, Elsevier, vol. 43(6), pages 1167-1180.
    9. Erich Seamon & Paul E. Gessler & John T. Abatzoglou & Philip W. Mote & Stephen S. Lee, 2023. "Climatic Damage Cause Variations of Agricultural Insurance Loss for the Pacific Northwest Region of the United States," Agriculture, MDPI, vol. 13(12), pages 1-13, November.
    10. Tim Philippi & Jörg Schiller, 2024. "Abandoning disaster relief and stimulating insurance demand through premium subsidies," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 91(2), pages 339-382, June.
    11. Stefan Baumgärtner & Martin F. Quaas, 2007. "Agro-biodiversity as natural insurance and the development of financial insurance markets," Working Paper Series in Economics 61, University of Lüneburg, Institute of Economics.
    12. Augeraud-Véron, Emmanuelle & Fabbri, Giorgio & Schubert, Katheline, 2021. "Volatility-reducing biodiversity conservation under strategic interactions," Ecological Economics, Elsevier, vol. 190(C).
    13. Jianru Fu & Ruiyuan Shen & Chao Huang, 2023. "How does price insurance alleviate the fluctuation of agricultural product market? A dynamic analysis based on cobweb model," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(5), pages 202-211.
    14. Ming Zhu & Ruihua Yang, 2023. "The Impact of Agricultural Insurance on Farmers’ Enthusiasm for Sugarcane Production: Evidence from Guangxi, China," Sustainability, MDPI, vol. 15(5), pages 1-18, February.
    15. Liu, Ziheng & Lu, Qinan, 2023. "Ozone stress and crop harvesting failure: Evidence from US food production," Food Policy, Elsevier, vol. 121(C).
    16. Juan He & Xiaoyong Zheng & Roderick Rejesus & Jose Yorobe, 2020. "Input use under cost‐of‐production crop insurance: Theory and evidence," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 343-357, May.
    17. Bhavani Prasad Thottadi & S. P. Singh, 2024. "Climate-smart agriculture (CSA) adaptation, adaptation determinants and extension services synergies: a systematic review," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 29(3), pages 1-29, March.
    18. Möhring, Niklas & Dalhaus, Tobias & Enjolras, Geoffroy & Finger, Robert, 2020. "Crop insurance and pesticide use in European agriculture," Agricultural Systems, Elsevier, vol. 184(C).
    19. Chemeris, Anna & Liu, Yong & Ker, Alan P., 2022. "Insurance subsidies, climate change, and innovation: Implications for crop yield resiliency," Food Policy, Elsevier, vol. 108(C).
    20. Misganaw Teshager Abeje & Atsushi Tsunekawa & Enyew Adgo & Nigussie Haregeweyn & Zerihun Nigussie & Zemen Ayalew & Asres Elias & Dessalegn Molla & Daregot Berihun, 2019. "Exploring Drivers of Livelihood Diversification and Its Effect on Adoption of Sustainable Land Management Practices in the Upper Blue Nile Basin, Ethiopia," Sustainability, MDPI, vol. 11(10), pages 1-23, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:masfgc:v:30:y:2025:i:3:d:10.1007_s11027-025-10205-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.