Journal of Entrepreneurial Strategies in Agriculture

Extended Abstract
Background: Climate variability is one of the most significant issues that has emerged in the agricultural sector over recent decades, posing challenges to the production of crops and horticultural products. Today, these changes are becoming a critical concern for farmers and the environment alike. Agriculture is a risk-prone activity, as farmers face various types of risks, including climatic risks, pests, diseases, market risks, and input-related challenges. The intensification of the adverse impacts of climate change is not unrelated to human behavior in rural areas and people's attitudes toward the environment or nature. Climate change is one of the most significant challenges facing the production and development of fruit trees. The high sensitivity of fruit trees to climatic conditions, along with the effects of shifting temperature and precipitation patterns on their growth, development, and productivity, underscores the importance of comprehensive research in the field of climate change. In all countries, the agricultural sector and its support have been a focal point, as this sector holds significant strategic importance. This is because it is directly linked to the essential needs of society and the health of the population in every nation. On the other hand, various risks can jeopardize the functioning of this sector, and one of the best ways to manage risk is by providing insurance services to agricultural and rural communities. Insurance companies are also seeking to introduce new tools, such as index-based weather insurance, as innovative entrepreneurial instruments. These tools not only create new job opportunities for the private sector but also enhance the satisfaction of farmers. Given the importance of agricultural insurance in reducing income risks for orchardists and the high dependence of orchard performance on weather conditions in Mazandaran Province, this study investigates the preferences of citrus orchardists in Tonekabon County for safeguarding against climatic risks in the year 2024.
Methods: The present study is applied research in terms of its objectiveand it is a survey and field-based study in terms of its methodology. The current study was conducted using the Heckman method within a two-stage conceptual framework. The participation or non-participation of orchardists in the index-based weather insurance program was examined in the first stage, and the factors influencing the orchardists' willingness to pay were identified and analyzed in the second stage. In the first stage of the present study, the dependent variable was derived from the response to the question of whether citrus orchardists are willing to participate in the index-based weather insurance program or not. Given that the dependent variable is a binary qualitative variable taking values of zero and one, binary regression models, such as the Probit model, were used to achieve the objective of the first stage. However, since the Tobit model incorporates both sets of observations in estimating the model parameters and determining the effect of independent variables on the dependent variable, factors that could influence an individual's willingness to pay for crop insurance were included as independent variables in the Probit model of this study. Meanwhile, factors that could affect the level of willingness to pay after the decision to participate were incorporated into a linear regression model. Data were collected using a survey method and a pre-prepared questionnaire. The sample size, determined based on Cochran's method and the variance of the characteristic trait (acceptance or non-acceptance of index-based weather insurance), was set at 387. The designed questionnaire was randomly distributed among orchardists.  SPSS and SHAZAM software were utilized for data analysis.
Results: The results of the study revealed that having a non-orchard-related occupation negatively affected the likelihood of accepting index-based weather insurance. According to the marginal effect statistic, orchardists who had additional income sources or occupations were 0.1 units less likely to accept index-based weather insurance than those whose sole occupation was orchard farming. The previous damage experience variable showed a positive and significant impact on the likelihood of accepting index-based weather insurance. According to the marginal effect value, if orchardists in Tonekabon experienced damage in previous years, their likelihood of accepting index-based weather insurance would be 0.11 units higher than those who had no history of damage. Additionally, efforts to adapt to climate change had a positive and significant impact on the likelihood of accepting index-based weather insurance. The results from calculating the marginal effect of this variable showed that if orchardists took measures to adapt and reduce damage to citrus and fruit trees before or during unfavorable weather conditions, such as snow, rain, and hail, their willingness to accept index-based weather insurance would increase by 0.12 units compared to the other group. In this study, the overall significance of the regression was assessed using the likelihood ratio test. Given a significance level of less than 5%, it can be concluded that the model results are highly reliable. Additionally, the results of the second-stage estimation revealed that the inverse Mills ratio was significant, indicating that the influencing variables in the decision-making and action stages of orchardists are different regarding index-based weather insurance. Furthermore, the average yield (orchardist income) and awareness of methods to combat orchard frost damage were the variables having a negative and significant impact on the willingness to pay for index-based weather insurance.
Conclusion: Index-based weather insurance represents a new entrepreneurial opportunity in the insurance industry. Based on the findings of this study, organizing region-specific and age-appropriate training sessions, timely and precise follow-ups by experts at the damage sites, and effective advertising through mass media can be beneficial in encouraging orchardists to adopt index-based weather insurance. These measures can assist planners in this field in promoting its acceptance.