Do forest producers benefit from the forest disaster insurance program? Empirical evidence in Fujian Province of China

Disaster insurance programs have been recognized as an effective strategy to reduce agricultural production risk. Although a considerable body of literature has focused on natural disaster insurance programs for agricultural producers, not much is known about forest disaster insurance. This paper contributes to this knowledge gap by looking at the Fujian Forest Disaster Insurance (FFDI) program in China. In particular, we examine the extent to which the socio-demographic characteristics and production practice of forest producers, along with other factors, are associated with their participation decision to the program. Moreover, we assess the impact of the FFDI program on household income. Using a household survey of 950 forest producers in Fujian Province in China, it is evident that the education of forest producers, participation in producers' organizations in the local area, and the incidence of forest fires in the local counties are significant determinants of participation in the FFDI program. With respect to the welfare effect, we found that the FFDI program significantly increased household income by approximately 10%. (C) 2014 Elsevier B.V. All rights reserved.