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

Abstract

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.

Farmers' perception and awareness towards agriculture insurance as a tool of risk management in Kaski and Chitwan Districts of Nepal

“…The study suggested that more insurance companies be incentivized to augment already existing efforts by Ghana Agricultural Insurance Pool (GAIP) to enrol 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 the uptake and accessibility of agricultural insurance (Ankrah, Kwapong, Eghan, Adarkwah, Gyambiby, 2021). Mehrad and Prabhum (2021) study in Iran suggested that agriculture premium is high however, farmers are motivated to acquire insurance service as it provides adequate protection against risk.…”

Input credit scheme, farm productivity and food security nexus among smallholder rice farmers: evidence from North East Ghana

“…Poor price of commodities was ranked as the sixth challenge of the IWAD credit scheme. Ankrah et al (2021) reported the immediate problem associated with increased access and use of credit for production activities is the increased supply of commodities in the market leading to the obvious lower prices of commodities. The test statistics of the Kendall's W was 0.641 and depicts that over sixty percent of the respondents were in agreement with the rankings of the constraints associated with the input credit scheme participation.…”

“…In addressing food security issues across sub-Saharan Africa, rice has been considered one of the major food commodities to improve food availability and security after maize and cassava (Ankrah et al. , 2021).…”

Behavior Analysis of Farmers in Tidal Swamp Land towards Agricultural Insurance

“…This situation occurs particularly in rural communities in developing countries. The low level of literacy and limited access to agricultural insurance information is likely to have contributed to the low awareness of rural communities on the importance of rice farming planning [3]. Moreover, it is undeniable that the value system adopted by farmers is believed to affect participation in agricultural insurance, as found in Anggraini's research [2].…”