Apple farmer’s willingness to pay for RWBCIS: Determinants and empirical evidences from Jammu and Kashmir, India

Climate-induced extreme events are increasingly affecting farmers’ livelihoods through weather-related losses such as flash floods, hailstorms, and rising temperatures. In response to these challenges, the Central Government has introduced the voluntary Restructured Weather Based Crop Insurance Scheme (RWBCIS) as an effective risk management strategy. Under this scheme, farmers are required to pay a premium of 5 percent of the total compensation to avail the benefits. Apple, a major commercial crop in the north-western Himalayas, contributes 70 percent of India’s total apple production, with a significant share attributed to the Jammu and Kashmir Union Territory. This study aims to explore whether apple growers are willing to pay for RWBCIS and to identify the drivers influencing their decision to purchase such insurance products. Data were collected from 900 apple growers in the purposively selected districts of Baramulla and Budgam in Jammu and Kashmir. The findings indicate that while all farmers were willing to adopt the weather-based crop insurance scheme, the majority were unwilling to pay the current premium. The estimated mean willingness to pay (WTP) was Rs. 37.22 per tree without covariates and Rs. 17 with covariates, compared to the prevailing Rs. 53 in the neighboring state of Himachal Pradesh. Factors contributing to the low WTP included a lack of knowledge about the scheme’s modalities, basis risk, and distrust in both government and private insurance companies. The government should consider innovative methods to provide existing subsidies to achieve the targeted coverage of 25 percent of farmers under the scheme.