Determinants of Crop Insurance Adoption in Sri Lanka: Empirical Evidence from the North Central Region

Purpose: This study aims to identify the key factors influcncing famers” crop insurance purchase decisions in Sti Lanka, with particular emphasis on the North Central Province, where agricultural risk exposure is high.
Design/ Methodology: The study population consists of all farmers engaged in agricultural activities in the North Central Province 262,447 farmers and using the Morgan sampling table, a sample of 400 farmers was sclected. Primary data was collected through a wellstructured questionnaire. The selected variables include knowledge of crop insurance, previous crop insurance experience, trust in crop insurance companies, level of risk borne by the farmer, and the amount of crop insurance premium. Multiple regression analysis was employed to cxamine the impact of these factors on crop insurance purchase decisions, while Pearson corrclation analysis was used to test the study hypotheses. Data analysis was conducted using SPSS.
Findings: The resuls reveal that knowledge of crop insurance, previous insurance experience, trust in insurance providers, and the level of risk faced by farmers have a significant positive relationship with crop insurance purchase decisions. In contrast, the amount of crop insurance premium shows a significant negative relationship with crop insurance adoption.
Originality/Value: This study addresses an important empirical gap in the Sri Lankan context by providing cvidence-based insights into crop insurance demand. Although limited to a single geographic region, the findings offer valuable implications for insurance providers and policymakers seeking to enhance the promotion, design, and adoption of crop insurance schemes in Sri Lanka.