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Field
Trial Status
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Before
in_development
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After
completed
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Field
Abstract
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Before
Although crop insurance is an important risk management strategy for farmers to secure their income stability, the adoption of crop insurance has been extremely low. Recent studies have highlighted the significant role of pay-at-harvest premiums in take-up rate for crop insurance. However, pay-at-harvest faces a major challenge of default. To address such issue, this research focuses on a key scientific question: “What is the best timing of premium payments to boost farmers’ demand for crop insurance and mitigate payment default?”. To answer this question, this research evaluates and compares the causal impacts of different timings of premium payments on farmers’ take-up of crop insurance (rice insurance) and payment default using a field experiment in Vietnam. The field experiment is carried out in 41 Village Savings and Loan Associations (VSLAs) over two rice seasons to examine the persistent impacts of the interventions. The combination of delayed premium payments through VSLAs raises the social cost of default and reduces transaction cost as premiums are collected via VSLAs.
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After
Although crop insurance is an important risk management strategy for farmers to secure their income stability, the adoption of crop insurance has been extremely low. Recent studies have highlighted the significant role of social network for crop insurance. This study utilizes unique data on the network of farmers who are members of autonomous micro-credit groups combined with randomized control trials, to investigate the effects of social network and self-learning on the long-term adoption of crop insurance. Premium subsidies were randomly assigned to 729 farmers across 44 Village Savings and Loan Associations (VSLAs) in Lai Chau province of Vietnam over three rice cropping seasons. Each farmer’s network was defined by the five fellow VSLA members with whom they most frequently discussed agricultural production and financial matters.
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Field
Trial End Date
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Before
March 31, 2023
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After
March 31, 2024
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Field
Last Published
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Before
October 12, 2021 02:35 PM
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After
April 24, 2026 01:51 AM
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Field
Intervention (Public)
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Before
a. Pay-up-front (control): Farmers are requested to pay premiums when they decide to purchase crop insurance at the beginning of the season.
b. Pay-at-harvest (treatment 1): Farmers are allowed to pay premiums (plus 1% interest per month) at the end of the season although they decide to purchase crop insurance at the beginning of the season. The added interest rate is based on VSLAs’ borrowing interest rate.
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After
Premium subsidy for crop insurance
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Field
Primary Outcomes (End Points)
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Before
take-up decision, default decision, agricultural investments, farmers’ income and expenditure
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After
Insurance uptake
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Field
Experimental Design (Public)
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Before
This research includes 5 stages. In the 1st stage, a pilot and baseline survey are conducted to collect basic information of 41 VSLAs and 800 farmers. This information is used to assign 41 VSLAs into different treatment arms using stratified randomization technique. Then, VSLAs’ leaders are trained in the 2nd stage to be able to make lists of participants, collect premiums, and distribute insurance contracts.
My field experiment is carried out over two seasons (3rd stage, 4th stage, and 5th stage) to examine the persistent impacts of the treatments. In each season, insurance educators introduce crop insurance to farmers through VSLAs’ meetings at the beginning of the season. After that, farmers have 2 weeks to purchase the insurance. Farmers in pay-up-front group (control group) pay premiums within these two weeks. Farmers in delayed-payment groups pay premium (plus interest) at the end of the season or other delayed timings, respectively. Follow-up survey is conducted at the end of each season to obtain four outcomes: take-up decision, default decision, agricultural investments, farmers’ income and expenditure.
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After
In the first season (April–May 2022, prior to the summer rice season), 44 VSLAs were randomly assigned to following groups.
Pure control group (including 14 VSLAs): all members receive a 50% crop insurance premium subsidy (Control group C).
Treatment group (including 30 VSLAs): members will randomly receive a 50% crop insurance premium subsidy (Treatment group T1) or a 100% crop insurance premium subsidy (Treatment group T2) by lottery onsite.
In the second season (November–December 2022, after the summer harvest and before the spring planting), we implemented individual-level lotteries determined subsidy levels (100%- 60,000VND subsidy, 67%-40,000VND subsidy, or 50%-30,000VND subsidy)
In the third season (April–May 2023), we followed a similar protocol as in the second season, with two modifications. First, the full subsidy level (100%) was removed, leaving only 67% and 50% subsidy levels. Second, we re-collected social network data to account for changes in VSLA membership across cycles.
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Field
Randomization Method
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Before
randomization done in office by a computer
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After
VSLAs randomization: randomization done in office by a computer based on VSLAs characteristics
Household randomization: onsite by lottery
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Field
Planned Number of Clusters
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Before
41
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After
44
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Field
Planned Number of Observations
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Before
800 households
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After
around 740 households
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Field
Sample size (or number of clusters) by treatment arms
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Before
control group: 13 VSLAs
treatment groups: 28 VSLAs
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After
pure control group: 14 VSLAs
treatment group 1: 15 VSLAs
treatment group 2: 15 VSLAs
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Field
Intervention (Hidden)
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Before
An additional treatment is considering, which is installments. With this payment scheme, farmers are allowed to pay premiums (plus 1% interest per month) in small proportions (monthly installments) throughout the season while their decisions to purchase crop insurance are made at the beginning of the season.
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After
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Field
Did you obtain IRB approval for this study?
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Before
No
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After
Yes
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Field
Secondary Outcomes (End Points)
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Before
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After
agricultural investments, farmers’ income and expenditure
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