FACTORS AFFECTING INDONESIAN PADDY HARVEST FAILURE: A COMPARISON OF BETA REGRESSION, QUASI-BINOMIAL REGRESSION, AND BETA MIXED MODELS

Abstract

The Paddy harvest failure rate is one of the key aspects in determining the total number of claims in a crop insurance policy. It is also an important factor indicating the fulfillment of targeted total production. Therefore, we proposed Beta Regression, Quasi Binomial Regression, and Beta Mixed Models which can be used to analyze significant variables affecting paddy harvest failure rates. Model selection and evaluations indicated that the Nested Beta Mixed Model is the best. Previous research has shown four significant fixed effect variables: drought, flood, pests, and disease risks. Pests and other types of risks also affect the variability of loss rate. All variables have positive effects, indicating higher values cause a higher possibility of a higher average harvest failure rate. High variability was shown for province, municipality, and farmers' random effects. Hence, to prevent a more significant loss rate, MoA should consider more intensive and innovative participatory activities in farmer groups to enhance good farming practices, especially for farmers who suffer from certain risks. These activities should also consider the local characteristics of each province or municipality. As for AUTP development and improvement, farmers with lower failure risks could be given a discounted premium to make it more appealing.