An Analysis of Factors Influencing Uptake of Agriculture Index Insurance among Smallholder Farmers—A Case of Kasama District in Zambia

Abstract

Kasama district is a rural farming district with a population of over 91,525 smallholder farmers. Smallholder farmers face several production risks including floods, pests and droughts which are being worsened due to climate change. To manage the impact of these risks, weather index insurance has been designed to help farmers hedge against the loss of income due to crop losses. However, the uptake of Weather Index Insurance (WII) in Zambia is low, and as for Kasama District, there is little documented information on factors influencing the uptake of WII among smallholder farmers. In this study, the Probit regression model was used to measure the expected change in the likelihood of uptake of WII given a unit change in the regressors. Data analysed were collected using a semi-structured questionnaire from 200 farmer respondents and an interview guide from 5 key informants purposively selected. The study drew participants from a population of smallholder farmers estimated to be 91,525 farmers in the district. SPSS and STATA were applied to analyse Quantitative data using the Chi-Square test at 5% and 1% levels of significance. The study concluded that age, knowledge of WII and alternative source of income were statistically significant factors influencing uptake of WII by smallholder farmers in Kasama district. In addition, whereas age and alternative income had a negative and significant effect on uptake, knowledge of WII had a positive and significant effect. Furthermore, the study concluded that education level, gender, the frequency of discussing WII during extension services meetings, perception on the price of WII, distance to the providers of insurance services from a farm, and use of traditional methods of managing production risks were not significant factors influencing How to cite this paper: Kaunda, S., & Chowa, T.

Why Is the Variation of Weather Insurance Index Adoption/ Uptake Exhibited as Such Among Small Holder Farmers; Testing the theory of Technology Adoption if it applies. Case of Zambia

“…Climate change and social and economic vulnerability are big problems for development, and they often need systematic and systemic solutions to fix them (Siankwilimba et al, 2021;Sweeney and Sterman,2000). Index-based microinsurance for weather risk transfer could be a part of long-term management solutions that can be scaled up (Kaunda and Chowa. 2023).…”