  This article investigates the effect of prices and socio-demographic
variables on the farmers decision to purchase agricultural insurance. A survey
has been conducted to 200 farmers most of whom are engaged in diversified
income-generating activities. The logistic estimation results suggest that
education and household income from farming activities positively affect the
likelihood of purchasing insurance. The demand for insurance is negatively
correlated with the premium paid per insured value, suggesting that insurance
is a normal good. Farmers are willing to pay (WTP) increasingly higher premiums
for contracts with a higher coverage ratio. According to the valuation model,
the WTP declines sharply for coverage ratios under 70%.
