This paper uses framed choice experiments to examine the preferences of smallholder farmers in
Malawi regarding alternative policy-based incentives to adopt conservation practices that reduce
soil erosion and increase yields. The policy incentives offered in the choice experiments included
an ideal index-based crop insurance contract, an index insurance contract with basis risk, cash
payments, and fertilizer subsidies. Prior to implementing the choice experiments, the farmers
participated in a workshop utilizing small group-based dynamic learning games that demonstrated
how index-based crop insurance contracts function. The choice experiment results indicate that
most farmers preferred cash payments to index insurance contracts, even when the insurance
contracts offered substantially higher expected returns. Further, more risk averse farmers were
more likely to prefer cash payments than less risk averse and risk loving farmers.