Document Type : Original Research


Faculty of Entrepreneurship, University of Tehran, Tehran, Iran


Insurance has always been an efficient tool in facilitating production and increasing investment through the world. Meanwhile, lack of investment has been a constant problem in the agricultural sector, as one of the most vulnerable economic sectors. Hence, insurance, as an effective tool for securing the return on investment, is likely to solve this problem. The current research is aimed at identifying and analyzing the role of insurance in risk management of modern agribusinesses. In order to fulfil the research objective, a mixed method research was designed and qualitative and quantitative tools were developed. In the qualitative part, the research population includes the experts of agriculture and investment in new businesses, while the population of the quantitative part is composed of greenhouse owners in Tehran province. 9 interviews were carried out in the qualitative part and data were analyzed through open and axial coding. In addition, 137 questionnaires were investigated in the quantitative part. Quantitative data were analyzed by structural equation modelling method. The results demonstrate that various types of risk, including production, market, and environmental risks have a negative effect on the insurance rate, In other words, insurance coverage decreases when risk increases, which is a rational result. Moreover, insurance has a positive effect on investment promotion and can offset the negative effect of risk and lead to an increase in investment and hence, establishment of new businesses in this field.


Agricultural Risk Management- Agricultural Sector Risk Management (2013). The World Bank.
Amini, F. (1998). Assessment of Investment Situation in Iran’s Agricultural Sector (in Persian). The Journal of Planning and Budgeting, 33: 95-119.
Aziz Nasiri, S. (2011). Weather-Based Crop Insurance as a Viable Instrument for Managing Agricultural Risks (in Persian). Masters’ Dissertation. Allameh Tabatabai University, ECO College of Insurance.
Barham, J. and Chitemi, C. (2009). Collective action initiatives to improve marketing performance: lessons from farmer groups in Tanzania. Food Policy 34(2009): 53–59.
Barrett, C. (2008) Smallholder market participation: Concepts and evidence from eastern and southern Africa. Food Policy 33(2008): 299-317
Barton, Su. (2003). Enhancing profitability greenhouse through improved personnel management. University of Delaware press.
Birchall, J. (2003). Rediscovering the co-operative advantage: poverty reduction through self-help. Geneva, Switzerland: International Labour Organisation.
Brom Fild, R. (2003). Enhancing Greenhouse profitability through improved Equipment purchasing. University of Rutgers press.
Bruynis, C., Goldsmith, P.D., Hahn, D.E., and Taylor, W.J. (2001). Critical success factors for emerging agricultural marketing cooperatives. Journal of Cooperation 16(2001): 14-24.
Campbell, T.S., and Kracaw, W.A. (1993). Financial risk Management Harper Collins College Pub. 220 p.
Cooper, D. R. & Schindler, S. P. (2003). Business research methods, (8th Ed). McGraw.
Esna Ashari. M. & Zokayi Khosroshahi, M. (2008). Physiology and technology post harvest. AbualiSina university press. vol. 298. (1th Ed). (In Farsi)
Food and Agriculture Organization. (2004). Greenhouse plants statistics. Jihad agriculture ministry. Tehran Retrieved from: .(In Farsi)
Fulton, M.E. and Gibbings, J. (2000) Response and adaptation: Canadian agricultural co-operatives in the 21st century. Ottawa: Canadian co-operative association and Le conseil Canadien de la cooperation.
Golovina, S. and Nilsson, J. (2009) Difficulties for the development of agricultural cooperatives in Russia: the case of the Kurgan region. Journal of Rural Cooperation 37(1): 52-70.
Gray, T.W. and Kraenzle, C.A. (1998) Member participation in agricultural cooperatives: a regression and scale analysis. RBS Research Report 165. Washington, DC: USDA, Rural Business Cooperative Service.
Hakelius K. (1996) Cooperative values: farmers’ cooperatives in the minds of the farmers. PhD thesis, Swedish University of Agricultural Sciences, Uppsala, Sweden.
Hall, C. H. (2003). Issues affecting profitability of the nursery and greenhouse industry .university of Tennessee press.
Hansen, M.H., Morrow Jr., J.L. and Batista, J.C. (2002) The impact of trust on cooperative membership retention, performance, and satisfaction: an exploratory study. International Food and Agribusiness Management Review 5(2002): 41-59.
Harkiess, R. (2003). Enhancing greenhouse profitability through improved materials handling and distribution. University of Delaware press.
Harwood, J., Heifner, R., Coble, K., Perry, J., & Somwaru, A. (1999). Managing Risk in Farming: Concepts, Research and Analysis. Washington, DC: Market and Trade Economics Division and Resource Economics Division, Economic Research Service, U.S. Department of Agriculture.
Heravi, A. (2005). Study on establishment costs of cucumber greenhouse production. First congress, in: proceeding of study on greenhouse Cultivation problems and challenges. Management and planning organization of Esfahan province. Esfahan. (In Farsi)
Hobbs, J.E. (1997) Measuring the importance of transaction costs in cattle marketing. American Journal of Agricultural Economics 79, 4(1997): 1083–1095.
Hollaway C., Nicholson C., and Delgado C. (1999) Agroindustrialization through institutional innovation: Transaction costs, cooperatives and milk-market development in the Ethiopian Highlands, MSSD Discussion Paper No. 35, Washington D.C.: International Food and Policy Research Institute.
Iturrioz, R. (2009). Agricultural Insurance. Washington, DC 20433: The International Bank for Reconstruction and Development/The World Bank.
Karantininis, K. (2007). The network form of the cooperative organization –an illustration with the Danish pork industry. In: Karantininis, K. and Nilsson, J. (eds.) (2007) Vertical markets and cooperative hierarchies: the role of cooperatives in the agri-food industry. Springer.
Kerzner, H. (2003). Project management: A system approach to planning, scheduling and controlling. Wiley.
Kim, J. (2005). A Credit Risk Model for Agricultural Loan Portfolios under the New Basel Capital Accord. Agricultural Economics.
Kleiber, C. and Zeileis, A. (2008) Applied econometrics with R. Springer.
Koupahi, M. (1994). Economics agriculture principal. Tehran university press. (9th Ed). (In Farsi)
Mahul, O. (2011). Agricultural Insurance. Retrieved from
Markelova H., Meinzen-Dick R., Hellin J., and Dohrn S. (2009) Collective action for smallholder market access. Food Policy 34, 1–7.
Miller, C. (2008). Risk Mitigation and Management for Agricultural Investment: Module: Investment and Resource Mobilization. FAO Policy Learning Programme.
Nto, P. O., Mbanasor, J. A., & Nwaru, J. C. (2011). Analysis of risk among agribusiness enterprises investment in Abia State, Nigeria. Journal of Economics and International Finance, 187-194.
OECD. (2009). Managing Risk in Agriculture: A Holistic Approach.
Ortmann, G.F., Woodburn, M.R., and Levin, J.B. (1995). Dimensions of risk and managerial responses to risk on commercial farms in Kwazulu-Natal, South Africa. Pp: 661-675. 10th International farm management.
Ozanne, A. (1999). Perverse Supply Response in Peasant Agriculture: A review. Oxford Development Studies 27(2): 251-270
Pannell, D. J. (2003). Uncertainty and adoption of sustainable farming systems. Drench: Clawer Press.
Poulton, C., Kydd J., and Doward A. (2006) Overcoming market constraints on pro-poor agricultural growth in Sub-Saharan Africa. Development Policy Review 24(2006): 243-277.
Risk Management in Agriculture: What Role for Governments? (2011) Organization for Economic Cooperation and Development.
Rutten, L. (2012). Innovative agricultural finance and risk management: Strengthening food production and trade in the transition region. Rome, Italy: prepared under the FAO/EBRD Cooperation.
Safely, Ch. (2003). Development of greenhouse and enhancing greenhouse profitability through improved marketing planning. North Carolina. State University.
Satari Far, M. (2006). Analysis on capital and human development. Allameh Tabatabai University press (1thed.). (In Farsi) World Bank. (1995). The Uruguay Round and the developing Economies. Retrieved from:
Schaffnit-Chatterjee, C. (2010). Risk Management in Agriculture: Towards market solutions in the EU. Frankfurt am Main, Germany: Deutsche Bank Research.
Schiff, M., and Montenegro, C.E. (1997). Aggregate Agricultural Supply Response in Developing Countries: A Survey of Selected Issues. Economic Development and Cultural Change 45(2): 393-410
Sexton, R. and Iscow. J. (1988) Factors critical to the success or failure of emerging agricultural cooperatives. Giannini Foundation Information Series 88-3. University of California, Davis: Giannini Foundation of Agricultural Economics.
Timmons, j. (1999), New Venture Creation: Entrepreneurship for the 21th Century. New York: Irwin McGraw Hill. 340-352.
Torkamani, J. (2000). Measuring productive efficiency of farmers: Techniques and application, Iran Agricultural Research 19: 115-128.
Torkamani, J. and Hardaker, J.B. (1996). A study of economic efficiency of Iranian farmers: An application of stochastic programming, Agricultural Economics 14(2): 73-83.