Designing a whole-farm revenue insurance for agricultural crops in Zanjan province of Iran

Mohammad Ghahremanzadeh; Rassul Mohammadrezaei; Ghader Dashti; Moharram Ainollahi

doi:10.7201/earn.2017.02.02

Authors

Mohammad Ghahremanzadeh University of Tabriz
Rassul Mohammadrezaei University of Tabriz
Ghader Dashti University of Tabriz
Moharram Ainollahi University of Tabriz

DOI:

https://doi.org/10.7201/earn.2017.02.02

Keywords:

Indemnity, Iran, price risk, whole-farm insurance, yield risk, Zanjan

Abstract

The purpose of this article is to design and empirically evaluate the Whole Farm Insurance (WFI) over the conventional insurance programs in Zanjan province of Iran. Historical farm-level and county-level data were used to estimate yield and price density functions. Both parametric and non-parametric methods were applied for predicting the future values and the PQH simulation method was utilized to calculate premium rates. Results revealed that loss ratios of the WFI are lower for farmers who insured more than one crop. Additionally, utilizing WFI reduces premiums. Moreover, premiums obtained from nonparametric method are relatively lower compared to the parametric approach.

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Author Biographies

Mohammad Ghahremanzadeh, University of Tabriz

Associate Professor, Department of Agricultural Economics, Faculty of Agriculture

Rassul Mohammadrezaei, University of Tabriz

Associate Professor, Department of Agricultural Economics, Faculty of Agriculture

Ghader Dashti, University of Tabriz

Associate Professor, Department of Agricultural Economics, Faculty of Agriculture

Moharram Ainollahi, University of Tabriz

PhD candidate, Department of Agricultural Economics

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