Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara Africa
Agricultural insurance products have been piloted in Sub-Saharan Africa (SSA) to address climate related risks faced by farmers. However, these products in general face low rates of adoption in SSA. Factors and challenges that may explain the low uptake of index-based insurance products in SSA are r...
| Main Authors: | , , , , , , |
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| Format: | Article |
| Language: | English |
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Kassel University Press
2017-08-01
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| Series: | Journal of Agriculture and Rural Development in the Tropics and Subtropics |
| Subjects: | |
| Online Access: | https://jarts.info/index.php/jarts/article/view/2017042052372 |
| _version_ | 1819293776638640128 |
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| author | Nepomuscene Ntukamazina Richard N. Onwonga Rolf Sommer Jean Claude Rubyogo Clare M. Mukankusi John Mburu Rahab Kariuki |
| author_facet | Nepomuscene Ntukamazina Richard N. Onwonga Rolf Sommer Jean Claude Rubyogo Clare M. Mukankusi John Mburu Rahab Kariuki |
| author_sort | Nepomuscene Ntukamazina |
| collection | DOAJ |
| description | Agricultural insurance products have been piloted in Sub-Saharan Africa (SSA) to address climate related risks faced by farmers. However, these products in general face low rates of adoption in SSA. Factors and challenges that may explain the low uptake of index-based insurance products in SSA are reviewed in this paper with the objective of assessing and documenting (i) the insurance products available to farmers, (ii) factors influencing farmers to purchase insurance products, (iii) challenges limiting farmers accessing to insurance products and (iv) opportunities that can positively enhance uptake in SSA. This review reveals that area yield index insurance, index-based crop insurance and index-based livestock insurance have been piloted or implemented in the region. The uptake of these products was found to be positively correlated with on-farm income/savings, literacy, and family size with estimated coefficients of 0.211, 0.292 and 0.018, respectively; and negatively correlated with premium rate (−0.183), age of farmer (−0.058), land tenure (−0.800) and farm size (−0.167). Challenges that impede uptake of index-based products include weakness of regulatory environment and financial facilities, basis risk, quality and availability of weather data, capacity building of stakeholders (farmer, insurer, and regulator), and lack of innovation for local adaptation and scalability. The current gap between high promise and low uptake calls for farmer-driven product design, strong public-private partnerships and improved quality and availability of weather data. |
| first_indexed | 2024-12-24T04:15:48Z |
| format | Article |
| id | doaj.art-fe6416bc53d64e09bdf6148797fb35d5 |
| institution | Directory Open Access Journal |
| issn | 1612-9830 2363-6033 |
| language | English |
| last_indexed | 2024-12-24T04:15:48Z |
| publishDate | 2017-08-01 |
| publisher | Kassel University Press |
| record_format | Article |
| series | Journal of Agriculture and Rural Development in the Tropics and Subtropics |
| spelling | doaj.art-fe6416bc53d64e09bdf6148797fb35d52022-12-21T17:15:57ZengKassel University PressJournal of Agriculture and Rural Development in the Tropics and Subtropics1612-98302363-60332017-08-011182171185Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara AfricaNepomuscene Ntukamazina0Richard N. Onwonga1Rolf Sommer2Jean Claude Rubyogo3Clare M. Mukankusi4John Mburu5Rahab Kariuki6Department of Land Resource Management and Agricultural Technology, University of Nairobi, P.O. Box 29053-00625, Nairobi, KenyaDepartment of Land Resource Management and Agricultural Technology, University of Nairobi, Nairobi, KenyaInternational Center for Tropical Agriculture (CIAT), Nairobi, KenyaInternational Center for Tropical Agriculture (CIAT), Arusha, TanzaniaInternational Center for Tropical Agriculture (CIAT), Kampala, UgandaDepartment of Agricultural and Applied Economics, University of Nairobi, Nairobi, KenyaAgriculture and Climate Risk Enterprise, Nairobi, KenyaAgricultural insurance products have been piloted in Sub-Saharan Africa (SSA) to address climate related risks faced by farmers. However, these products in general face low rates of adoption in SSA. Factors and challenges that may explain the low uptake of index-based insurance products in SSA are reviewed in this paper with the objective of assessing and documenting (i) the insurance products available to farmers, (ii) factors influencing farmers to purchase insurance products, (iii) challenges limiting farmers accessing to insurance products and (iv) opportunities that can positively enhance uptake in SSA. This review reveals that area yield index insurance, index-based crop insurance and index-based livestock insurance have been piloted or implemented in the region. The uptake of these products was found to be positively correlated with on-farm income/savings, literacy, and family size with estimated coefficients of 0.211, 0.292 and 0.018, respectively; and negatively correlated with premium rate (−0.183), age of farmer (−0.058), land tenure (−0.800) and farm size (−0.167). Challenges that impede uptake of index-based products include weakness of regulatory environment and financial facilities, basis risk, quality and availability of weather data, capacity building of stakeholders (farmer, insurer, and regulator), and lack of innovation for local adaptation and scalability. The current gap between high promise and low uptake calls for farmer-driven product design, strong public-private partnerships and improved quality and availability of weather data.https://jarts.info/index.php/jarts/article/view/2017042052372adoption driving factorcrop and livestock insurancedeveloping countriesweather risk management |
| spellingShingle | Nepomuscene Ntukamazina Richard N. Onwonga Rolf Sommer Jean Claude Rubyogo Clare M. Mukankusi John Mburu Rahab Kariuki Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara Africa Journal of Agriculture and Rural Development in the Tropics and Subtropics adoption driving factor crop and livestock insurance developing countries weather risk management |
| title | Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara Africa |
| title_full | Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara Africa |
| title_fullStr | Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara Africa |
| title_full_unstemmed | Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara Africa |
| title_short | Index-based agricultural insurance products: challenges, opportunities and prospects for uptake in sub-Sahara Africa |
| title_sort | index based agricultural insurance products challenges opportunities and prospects for uptake in sub sahara africa |
| topic | adoption driving factor crop and livestock insurance developing countries weather risk management |
| url | https://jarts.info/index.php/jarts/article/view/2017042052372 |
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