Willingness to pay for weather index-based insurance in semi-subsistence agriculture: evidence from northern Togo

Ali, Essossinam; Egbendewe, Aklesso Y.G.; Abdoulaye, Tahirou; Sarpong, Daniel Bruce

doi:10.1080/14693062.2020.1745742

Cited by 26 publications

(8 citation statements)

References 70 publications

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“…While insurance providers might not change the literacy skills of the farmers, they can provide more information. The evidence shows that where information has been provided, farmers and pastoralists increase their understanding of insurance as well as demand (Patt et al, 2009;Lybbert et al, 2010;McPeak et al, 2010;Takahashi et al, 2016;Belissa et al, 2019;Vasilaky et al, 2019;Ali et al, 2020a). Information might be provided through games (McPeak et al, 2010;Vasilaky et al, 2019), information brochures (Takahashi et al, 2016, or training sessions (Dercon et al, 2014).…”

Section: Education Knowledge and Informationmentioning

confidence: 99%

Determinants of uptake and strategies to improve agricultural insurance in Africa: a review

2021

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Weather shocks affect smallholder farmers and pastoralists in Sub-Saharan Africa unequally. Agricultural insurance has emerged as a safety net option to protect farmers’ welfare. However, in comparison to other regions, fewer African farmers and pastoralists have adopted agricultural insurance. This review synthesises broad recent literature on why insurance take-up has remained low and highlights six key themes, including: (1) product quality, (2) product design, (3) affordability, (4) information and education, (5) behavioural and sociocultural factors, and (6) the role of government in enabling markets. We shed light on how insurance uptake can be encouraged.

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Section: Education Knowledge and Informationmentioning

confidence: 99%

Determinants of uptake and strategies to improve agricultural insurance in Africa: a review

2021

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“…Globally, access to WII in the agricultural sector is limited, even with heavy subsidies (Giné and King and Singh 2020). One of the main reasons is that low-income farmers in developing countries have limited access to WII without a subsidy or other supporting measures, for example, social protection (Väänänen et al 2019), because of fund constraints to afford the up-front premium for insurance (Belissa et al 2019, Ali et al 2020.…”

Section: Limitations Of Wii and Microcreditmentioning

confidence: 99%

“…Empirical observations support such a hypothesis by showing that microcredit can solve the liquidity constraints that farmers face and can motivate their willingness to participate in WII (Shee et al 2015, BalmaIssaka et al 2016). A case study from Togo indicates that farmers are more willing to pay for WII when combined with microcredit (Ali et al 2020).…”

Section: Combined Finance Schemes: Potential For Overcoming Limitationsmentioning

confidence: 99%

Impacts and synergies of weather index insurance and microcredit in rural areas: a systematic review

Li¹,

Aleksandrova²

2022

Environ. Res. Lett.

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Weather constitutes a major source of risks facing households in rural areas, which are being amplified under climate change. In this context, two main rural financial services, weather index insurance and microcredit, have been increasingly adopted by farmers worldwide. However, the understanding of the socioeconomic and ecological impacts of these rural finance schemes, including potential maladaptive outcomes, remains ambiguous. We review the recent literature on weather index insurance and microcredit for farmers and find that both rural financial services have positive economic impacts, though benefits to the poorest populations remain controversial. Moreover, their impacts on the ecological systems are less studied and are found to be mainly negative. In addition, considering that both financial instruments have strengths and limitations, we argue that combination schemes (e.g., a hybrid product) may generate positive synergistic effects on building socioeconomic resilience to climate risks in agricultural regions. However, this may also add new economic risk to local financial institutions. This comprehensive review provides a reference for the potential benefits and risks of agricultural ﬁnance innovations. Further studies on the ecological impacts of rural financial services and the synergistic effects of the combination on socioeconomic and ecosystem resilience in rural contexts are needed to fill the current research gap.

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“…This further raises the question as to whether the factors that influence participation and extent of participation in the WII have been well understood. In addition, many studies analyze hypothetical contracts that assess willingness to adopt index based insurance (Ali, Egbendewe, Abdoulaye, & Sarpong, 2020;Sibiko, 2016;Sibiko, Veettil, & Qaim, 2018). Other studies show that the social, economic, institutional factors, perceptions as well risk preference and index insurance attributes largely influence adoption and willingness to adopt WII (Adjabui, Tozer, & Gray, 2019;Sibiko & Qaim, 2020).…”

Section: Introductionmentioning

confidence: 99%

Determinants of Participation of Smallholder Farmers in Weather Index Insurance in Embu County, Kenya

Isaboke¹

2021

jae

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The study examined how multiple factors influence participation of farmers in Weather Index Insurance WII in Embu County, Kenya. Data wer e collected from a sample of 401 smallholders following multi stage sampling technique The study employed the Cragg ’s Double Hurdle model in determining factors that influence participation and extent of participation in WII. Results revealed th at short rain season, household size, land size, perception of the household head on WII , owners h ip of a mobile phone a nd location of the farm were important factors in explaining participation in WII. The distance to a registered agro veterinary products outlet, insurance premium , group membership, the weather station in Runyenjes station and distan c e to the local weather station influenced probability to participate negatively. Similarly, ownership of mobile phone had a positive influence on the extent of participation in WII while the size of the household, distance to a registered agro veterinary p roducts outlet and land size were significant with a negative influence. The findings of this study highlight the importance of shaping farmers’ perceptions to wards WII, promotion of policies that allow for access and use of information and communication t echnologies ( such as mobile phones by the farming households as a pathway to providing smart so lutions to smallholder farmers in dealing with weather rela ted risks . Further, the research recommends for development of policies that would ensure modest WII insurance premiums that are aligned to the unique need s of the smallholder farmers.

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Willingness to pay for weather index-based insurance in semi-subsistence agriculture: evidence from northern Togo

Cited by 26 publications

References 70 publications

Determinants of uptake and strategies to improve agricultural insurance in Africa: a review

Determinants of uptake and strategies to improve agricultural insurance in Africa: a review

Impacts and synergies of weather index insurance and microcredit in rural areas: a systematic review

Determinants of Participation of Smallholder Farmers in Weather Index Insurance in Embu County, Kenya

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