Thesis (BS Agribusiness Economics) -- University of the Philippines Mindanao, May 2016

Agriculture facilities poverty reduction and attainment of food security for all sectors of society by producing food at prices within the capacity of everybody and by following livelihood opportunities for farm households. However, agriculture is the most adversely affected sector to the prevailing climate change on the form of droughts, typhoons, pests and disease attacks among others. Income sources of around 12 million people in the Philippines will be affected by the occurrence of these adverse events. Without implementation of preventive measures that will allow farmers to cope with these changes, uncertainties to livelihoods will continue to exists among them which will threaten their capability of acquiring enough of their necessities such as food for an active and healthy living. Hence, in this case, agricultural insurance as a risk management tool can hedge income losses induces by climate change through indemnity payments and allow farmers to cope with the uncertainties without compromising their consumption of their necessities. Agricultural insurance was provided to smallholder farmers for free by the government through their attached agency, PCIC. However, the participation rate among farmers remains to be low especially among rice farmers. Hence, this study sought to answer what factors influence participation decision of farmers towards agricultural insurance to provide recommendations in improving the implementation of the existing program. The study was conducted in Barangay Dujali in the Munacipality of Dujali, Province of Davao del Norte where rice farming is one of the main sources of livelihoods of the people. After implementing binary logistic regression, the study found that none of the demographic factors significantly influence the participation decision of farmers. Knowledge about the agricultural insurance program and the risk seeking attitude of farmers on the other hand were the factors found to significantly influence the participation decision of farmers. Hence, the recommendation of this paper focused on improving the awareness of farmers about the agricultural insurance program which is tailored to fit the risk averse attitude of farmers.