Analysis of Factors Affecting Farmers’ Decisions to Get Agricultural Insurance: The Case of Oltu District of Erzurum Province

This study aims to examine the socio-economic factors influencing the decision to purchase agricultural insurance among farmers in the Oltu district of Erzurum Province. Primary data obtained from a total of 150 surveys applied in Oltu district were used in the research. The analysis, based on the probit model, identifies key variables affecting the likelihood of purchasing insurance and explores their relationships. The findings are consistent with previous literature. The results show that an increase in household size raises the likelihood of purchasing insurance, as risk-sharing within families may enhance the need for insurance. Non-agricultural activities reduce the need for insurance, as income from these activities allows farmers to manage risks more easily. The increase in land ownership slightly reduces the demand for insurance, although the effect is weaker. Farmers with larger landholdings tend to have more resources and better risk management, thus reducing their insurance needs. An increase in livestock count significantly raises the likelihood of purchasing insurance. Farmers engaged in livestock farming are more inclined to insure their assets, as livestock represent high-risk assets. Tractor ownership also increases the likelihood of purchasing insurance, although the effect is borderline. Tractor owners generally operate larger farms, thus increasing their insurance needs. The model's validity was confirmed through a Chi-Square test, which rejected the independence hypothesis, showing that the probit model is reliable. The study suggested strategies to increase insurance use, such as supporting small businesses, applying insurance incentives to small farmers, developing livestock insurance policies, and improving access to agricultural machinery.