Estimation of the Amount of Rice Crop Insurance Premium in the Citarum River Basin

Determination of crop insurance premiums in the Citarum River basin can be calculated by mathematical methods. One of the methods of calculation of the premium that is the normal curve methods with data on crop productivity is assumed to be Gaussian. In this thesis are discussed in crop insurance premium calculations Areas Citarum River basin West Bandung Regency with normal curve method with a significant level of coverage. These methods are used because data on crop productivity gained Gaussian. Normal curve method is used without using the assumption of coefficients of variation, and try for some level of coverage. Application materials used are rice crop productivity data in the Citarum River basin of West Bandung Regency in 2008-2014. This research resulted in the value of the rice crop insurance premiums for farmers in the area based on a certain level of coverage.


Introduction
The agricultural sector is one sector that has an important role in the national economy (Segura, 2010;Tindeche, 2014). Including the agricultural sector in the Citarum River Basin. One of the roles of the agricultural sector is as a foreign exchange earner when agricultural products are exported abroad (Josling, 2010;Glauber, 2012;Rome, 2018;Haberli, 2018). However, on the other hand the agricultural sector has a high risk of natural dynamics or pest attacks that can result in a decrease in production yields and so far the farmers bear the risks themselves. On the other hand, the level of welfare of farmers so far tends to be below the poverty line. Farmer's family income is estimated to be around IDR 500 thousand per month so that the problem of farmer's poverty becomes a crucial problem (Druilhe, 2012;FAO, 2017). In the face of risk, farmers have done various things to minimize losses. However, the ability of farmers to deal with these risks is often constrained by lack of capital. e- ISSN: 2722ISSN: -1016 The agricultural sector is one sector that has an important role in the national economy (Segura, 2010;Tindeche, 2014). Including the agricultural sector in the Citarum River Basin. One of the roles of the agricultural sector is as a foreign exchange earner when agricultural products are exported abroad (Josling, 2010;Glauber, 2012;Rome, 2018;Haberli, 2018). However, on the other hand the agricultural sector has a high risk of natural dynamics or pest attacks that can result in a decrease in production yields and so far the farmers bear the risks themselves. On the other hand, the level of welfare of farmers so far tends to be below the poverty line. Farmer's family income is estimated to be around IDR 500 thousand per month so that the problem of farmer's poverty becomes a crucial problem (Druilhe, 2012;FAO, 2017). In the face of risk, farmers have done various things to minimize losses. However, the ability of farmers to deal with these risks is often constrained by lack of capital.
During this time the government has issued many policies and programs to help farmers face these risks. Some of them are such as seed subsidies, fertilizer subsidies, production input assistance, and credit to the agricultural sector. However, this assistance is still not enough to overcome various problems in the agricultural sector, especially problems caused by natural conditions. Thus, one effort that needs to be done to reduce the risk of loss is to introduce crop insurance in the agricultural sector. This strategy has been widely adopted by farmers in developed countries, or some farmers in developing countries (Surminski, 2013;Surminski, 2014) to avoid losses. Therefore, agricultural insurance is one strategy to deal with the risks of damage in the agricultural sector. Including for the agricultural sector in the Citarum watershed.

Materials and Methods
This research will discuss the calculation of crop insurance premiums (rice) using the normal curve method and the calculation of reserve values using the Unearned Premium Reserve (UPR) method. The normal curve method itself is a method for calculating agricultural insurance premiums using the help of a normal distribution curve. This method was first discovered by Ralph R. Botts and James N. Boles in 1958, which was then used by the Federal Crop Insurance Corporation (FCIC) as a method for determining crop insurance premiums in the United States, and Manitoba Crop Insurance (MCIC) in Canada . This method is used because the frequency of distribution of rice productivity in the Citarum River Basin (DAS) is normally distributed. This method assumes that the parameter value of the variance coefficient is 0.25 or in other words the parameter value of the standard deviation of agricultural products is 25% of the average parameter value. While Unearne Premium Reserve is a calculation of the value of premium reserves that have not yet been income.

The Normal Curve Method
In the normal curve method with coverage level C ( 0 < C < 1 ),, Y rice productivity is normally distributed with an average  and variance 2  . Compensation for yields less than the coverage level can be written as follows: The above compensation can be calculated as follows: The above equation is a formula used to calculate the premium value of the normal curve method, so it can be written:

Unearned Premium Reserve (UPR)
There are several methods used in the calculation of this Unearned Premium Reserve. Which will be used in this thesis is the 1/24 method, where in this method each policy is issued at the beginning of the month and mid-month.
Because in this study using the 1/24 method, the premium value per one planting period per half month will be converted first. One planting season averages about 4 months, then the reserve value is searched using the formula:

Rice Crop Insurance Premium in the Citarum River Basin
The data used in this study are secondary data, namely Rice Crop Productivity Data in the Citarum Watershed, West Bandung Regency from 2010 to 2014, which is attached in Appendix 1. Furthermore, these data will be used to estimate the value of crop insurance premiums in the Citarum Watershed. . Following is a table of rice productivity data in the Citarum River Basin in West Bandung Regency. Using the IBM SPSS 23 application, testing of data distribution using the Kolmogorov-Smirnov Test One-Sample method obtained results as shown below Gambar 1 Hasil metode One-Sample Kolmogorov-Smirnov Test Figure 1. Results of the Kolmogorov-Smirnov Test One-Sample method In the above results it can be seen that the value of sig = 0.068> 0.05, so that Ho is not rejected or accepted, which means that the productivity data of rice plants in the Citarum watershed are normally distributed.
This study involved some adjustments related to the compensation system and coverage level involvement. In this case farmers who only harvest a maximum of 25% of the planted area will receive full compensation of IDR 6,000,000.00 As for other cases depending on the level of damage and age of planting. ; > The next step is to look for expectations of compensation in Eq. Yield or rice productivity is equal to Y, normally distributed with the average  variance 2 , then the compensation expectations can be calculated as follows:

Premium =
With an average of ̅ = , 9649 and standard deviation = 1.491225, for coverage rates of 40%, 50%, 60%, 65%, 70%, 75%. The value of crop insurance premiums in the Citarum River Basin is calculated using equation (2) and the results are as follows; 88,200,243,800,551,040,1,412,400,1,935,600 are the total premiums. Based on government regulations, 80% of premiums are borne by the government, so farmers only bear 20%, i.e.; 17,640, 60,960, 137,760, 282,480, 387,120. If a farmer buys an agricultural insurance policy with a 60% coverage rate, then the farmer only has to pay IDR 137,760.00 per hectare of land for one growing season. If at the time of harvest later the farmers' rice yields are less than 25% of the average long-term yield, then the farmer gets full compensation, amounting to IDR 6,000,000. If the yields are between 25% and 60% of the average long-term yield, then the farmer receives compensation in the amount adjusted to the farmer's yield. If the farmer's rice yield is more than 60% of the average long-term yield, then the farmer does not get compensation. The same explanation can be applied for coverage levels other than 60%.

Reserve Value of Rice Crop Insurance in the Citarum River Basin
Calculate the reserve value in this thesis using the 1/24 method, based on the formula, where the insurance policy is assumed to be issued every mid-month. Must be converted first value of premiums per one planting period to premiums for policies in this method. Next with the formula: Looked for the value of reserves based on premiums for each level of coverage. The results are obtained as follows; 91,282,254,450,576,107,1,461,748,2,013,222 for premiums with coverage rates of 40%, 50%, 60%, 70% and 75%.