Farmers’ behaviour in risky decision-making : a multiple case study of farmers’ adoption of crop insurance as a risk management tool

Sammanfattning: Risk is highlighted as an increasingly present aspect of the agricultural business, and it is important for agricultural producers to manage risk effectively. The implementation of risk management strategies and the adoption of risk management tools are some of the most complex decisions for farmers to execute. For Swedish farmers the private crop insurance is one available risk management tool to mitigate production risks caused by unforeseen weather events. Farmers’ decision behaviour in situations that include risk and uncertainty is a reflection of their risk propensity and risk perception. To explain farmers’ adoption of risk management strategies it is important to understand their decision-making behaviour. Earlier studies of farmers’ risky decision-making behaviour use a quantitative approach to evaluate how the determinants risk propensity and risk perception interplay in farmers’ choice to implement a certain risk management strategy. In this study a qualitative multiple case study approach is applied to evaluate farmers’ decision to purchase crop insurance as a risk management tool. The aim is to investigate underlying factors of risky decision-making behaviour, and their importance for farmers’ decision to purchase a crop insurance. The results of this study is based on 13 interviews with crop farmers in the region of Scania in the southern part Sweden. The type of interviews that is used are semi-structured interviews that was analysed through thematic coding. The interviews were based on the Sitkin and Pablo (1992) model of decision-making behaviour under risk and uncertainty. This study contributes with knowledge about what underlying factors that are of importance for farmers’ crop insurance decision in the studied context. It also contributes with a suggestion to include the factor of status quo, to describe the farmers’ behaviour in their continued decision to purchase a crop insurance. The results of this study imply that the underlying factors of importance to describe farmers’ behaviour differ depending on if the decision is conducted for the first time, or if it is a repeated decision.