Index-based weather insurance for perennial crops: A case study on insurance supply and demand for cocoa farmers in Ghana

Afriyie-Kraft, Lydia; Zabel, Astrid; Damnyag, Lawrence

doi:10.1016/j.wdp.2020.100237

Cited by 13 publications

(11 citation statements)

References 32 publications

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“…Commercial insurance schemes were initially piloted in the northern region by Innovation for Poverty Action (IPA) in an action research program in 2009 [23]. Consequently, limited studies [17,20,24] have focused on southern Ghana. Among the few existing studies on Ghana, the majority [24][25][26][27] have focused on cash crops (cocoa, cashew) with scanty studies [17,19,28] on food crops.…”

Section: Introductionmentioning

confidence: 99%

“…Consequently, limited studies [17,20,24] have focused on southern Ghana. Among the few existing studies on Ghana, the majority [24][25][26][27] have focused on cash crops (cocoa, cashew) with scanty studies [17,19,28] on food crops. Addey, Jatoe [20] argued that food crops constitute major staples cultivated in southern Ghana that warrant studies on agricultural insurance.…”

Section: Introductionmentioning

confidence: 99%

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Agricultural insurance access and acceptability: examining the case of smallholder farmers in Ghana

et al. 2021

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Background Weather-related risks thwart agricultural productivity gains especially in the face of climate change. Agricultural insurance serves as a reliable risk mitigation instrument for coping with climate-related hazards. This notwithstanding, agricultural insurance penetration among smallholder farmers in the global south remains low. This study investigated the access and acceptability of agricultural insurance among smallholder food crop farmers in Ghana. Method The study employed a mixed-methods approach involving both quantitative and qualitative approaches. The study was carried out in the Northern, Volta and Western regions involving 7 communities in 5 districts. A total of 200 farmers were sampled through a multi-stage purposive sampling and interviewed. A cross-sectional survey involved 100 respondents under the quantitative approach whilst the qualitative study engaged additional 100 farmers. Results The results show that smallholder farmers’ access and acceptability of agricultural insurance is low (14%) and scarce but ironically considered useful by many (90%) as an effective tool to deal with agricultural risks. Inadequate knowledge about agricultural insurance products constituted the most stated reason (64%) for the scarce adoption rate, followed (23%) by the unavailability of insurance products in areas needed but absent. A few (5%) reported insurance to be expensive. Acceptability and accessibility of agricultural insurance are further influenced by gender, educational level, low knowledge, information asymmetry and wrong perception concerning agricultural insurance products. Sense of security and reduced impact of climate variabilities constituted important benefits guaranteed by agricultural insurance. Conclusions Agricultural insurance access and acceptability is constrained by limited knowledge of agricultural insurance products. It is recommended that more insurance companies be incentivized to augment already existing efforts by Ghana Agricultural Insurance Pool (GAIP) to enroll more smallholder farmers. The government can consider bundling existing insurance products with credit or inputs under the Planting for Food and Jobs Programme (PFJ) to improve uptake and accessibility of agricultural insurance.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Agricultural insurance access and acceptability: examining the case of smallholder farmers in Ghana

et al. 2021

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“…Product education is still crucial, both before and after the product is released. Lastly, additional benefit of weather-based index insurance is its quick payout (Afriyie- Kraft et al, 2020). Rapid payments are possible due to the measurement of weather station data with no field loss correction.…”

Section: Advantages Of Weather-based Index Insurancementioning

confidence: 99%

“…They can also assist families in increasing their investments in a volatile environment, in attractive yet hazardous chances that boost income over time; this, in turn, assists households in rising out of impoverishment, which renders them more exposed to catastrophes in the first place. Many experiments suggest that weather-based index insurance products can lead to larger investments by crop and livestock producers by lowering risk exposure (Afriyie-Kraft et al, 2020). Weather-based index insurance products are often most successful when designed to protect against severe weather disasters in terms of development.…”

Section: Role Of Weather-based Index Insurance In Support Of Agricult...mentioning

confidence: 99%

Weather Based Index Insurance and Its Role in Agricultural Production

Kajwang¹

2022

IJA

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Purpose: Insurance not only is a shock absorber for farmers and other actors in the agricultural value chain, but it also enables access to credit and hence is an integral part of financial inclusion, and it enables/protects investments in better inputs and technologies which increase productivity. The different forms of insurance also reduce the government's budget exposure to agricultural risks. Crop insurance could incentivize farmers to increase their input use but indemnity-based crop insurance programs are plagued by market failures. The purpose of this research work was to examine weather-based index insurance and its role in agricultural production. This study highlights the key opportunities for weather-based index products and bring further clarity to how the use of weather-based index insurance can help to transform agriculture production. Methodology: Relevant book references and journal articles for the study were identified using Google Scholar. The inclusion criteria entailed papers that were not over five years old. Findings: This study found that the uptake of weather-based index insurance is positively and significantly associated with the use of chemical fertilizer and improved seeds, and also with crop yield. The study concludes that upscaling of weather-based index insurance programs may help to spur agricultural development in agricultural production. Recommendations: The study recommends that weather-based index insurance be linked to an existing development program or other market opportunities to provide added value to the client. As a stand-alone product, weather-based index insurance may be seen as an unnecessary cost and have little demand from farmers who face a variety of risks in addition to weather risks. The study also recommends partnership between weather-based index insurance programs and complementary agricultural development or risk management programs. NGOs in particular could play an important and independent role in the extension of information to farmers, possibly in conjunction with official extension services.

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“…Hill et al (2019) pointed out that long delays in delivery of indemnity payments hinder the WII supply. Afriyie-Kraft et al (2020) suggested that well-planned supply of WII could minimize the basis risk problem in index-insurance. Jhonson (2021) argued that insufficient claim payouts impede the effective supply of index-insurance.…”

Section: Literature Reviewmentioning

confidence: 99%

Modelling the barriers of weather index insurance service adoption integrating expert mining and ISM Fuzzy-MICMAC

Singh¹,

Agrawal

2021

BIJ

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PurposeThe purpose of this study is to explore and prioritize the barriers that affect weather index-insurance (WII) adoption among customers by utilizing interpretive structural modelling (ISM) and fuzzy-MICMAC.Design/methodology/approachThis paper utilized the combined approach in two phases. In first phase comprehensive literature study and expert mining method have been performed to identify and validate WII adoption barriers. In second phase, ISM has been utilized to examine the direct relationships among WII adoption barriers in order to develop a structural model. Further, fuzzy-MICMAC method has been utilized to analyse indirect relationships among barriers to explore dependence and driver power.FindingsThis study has identified 15 key barriers of WII adoption among customers and developed a structural model based on binary direct relationship using ISM. Later, the outcomes of ISM model have been utilized for analysing the dependence and driver power of each WII adoption barriers in cluster form using fuzzy-MICMAC. The customer awareness related WII adoption barrier are mainly at the top level, WII demand related barriers are in the centre and WII supply related barriers at the bottom level in ISM model.Practical implicationsThe findings offered important insights for WII insurers to understand mutual relationships amongst WII adoption barriers and assists in developing strategy to eliminate dominant key barriers in order to enhance their customer base.Originality/valueBased on best of author's knowledge this paper firstly integrates the ISM fuzzy-MICMAC method into identification and prioritization of barriers that affects WII adoption among customers.

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Index-based weather insurance for perennial crops: A case study on insurance supply and demand for cocoa farmers in Ghana

Cited by 13 publications

References 32 publications

Agricultural insurance access and acceptability: examining the case of smallholder farmers in Ghana

Agricultural insurance access and acceptability: examining the case of smallholder farmers in Ghana

Weather Based Index Insurance and Its Role in Agricultural Production

Modelling the barriers of weather index insurance service adoption integrating expert mining and ISM Fuzzy-MICMAC

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