A study on Key determinants influencing the adoption and effectiveness of crop insurance schemes for Achieving Sustainable Agricultural Growth

Abstract

This study investigates the key determinants influencing the adoption and effectiveness of crop insurance schemes to achieve sustainable agricultural growth in Haryana, India. Given the critical role of crop insurance in mitigating agricultural risks and enhancing farmers’ resilience against climatic and market uncertainties, understanding the factors that drive its adoption and perceived effectiveness is vital for policy formulation and program implementation. Utilizing data collected from 400 farmers across Haryana, the study employs Structural Equation Modeling (SEM) through Smart PLS 4 to analyze complex relationships among constructs including awareness, accessibility, trust in the insurance scheme, perceived effectiveness, and sustainable agricultural growth. The findings reveal that awareness and accessibility significantly influence farmers’ trust in crop insurance schemes, which in turn positively affects their perception of the scheme’s effectiveness. Furthermore, perceived effectiveness is identified as a crucial driver of sustainable agricultural growth, mediating the effects of awareness, accessibility, and trust. These results underscore the importance of comprehensive awareness campaigns and improved accessibility mechanisms to foster trust, which is pivotal in enhancing the perceived value and adoption of crop insurance. The mediation analysis highlights the interconnectedness of these factors, suggesting that isolated interventions are insufficient without simultaneously addressing trust and perceived benefits. This study contributes to the extant literature by providing empirical evidence from a region-specific context, enhancing understanding of the behavioral and institutional dimensions of crop insurance adoption. The research offers practical implications for policymakers, recommending integrated strategies that combine education, infrastructure improvements, and transparent communication to bolster insurance uptake and effectiveness. Limitations include the use of cross-sectional data and focus on a single geographic region, with suggestions for future research involving longitudinal designs and broader socio-economic variables. Overall, the study provides a nuanced framework for improving crop insurance schemes as a mechanism for sustainable agricultural development, offering valuable insights for stakeholders aiming to enhance food security and farmer livelihoods in Haryana and similar agrarian contexts globally.