Forestry insurance preference among tree growers in the Ashanti Region of Ghana: a tobit and multi-nomial regression approach

Abstract

PurposeThe study analyses the preference for forestry insurance amongst tree growers in the Ashanti Region of Ghana. Specifically, the authors examine the factors influencing the amount of forestry insurance and the choice for forestry insurance types.Design/methodology/approachA total of one hundred and seventy (170) tree growers were sampled for the study. The tobit model, multi-nomial regression and Kendall's tau were employed to analyse the factors affecting the amount for forestry insurance, the choice for forestry insurance types and the perils to forest quality, respectively.FindingsThe results of the study indicate that the incidence of bush fire and theft were the key perils that affect forest quality. In total, 52.94% of respondents preferred forest plantation fire insurance as named-peril insurance whereas 70.59% preferred a combination of forest plantation fire, windstorm and consequential loss insurance as multi-peril insurance. The majority (89.4%) of the respondents were willing to pay an amount between Ghc 10.00–49.00 (US$ 2–8) per stand. On the one hand, results of the tobit model reveal age, income, experience in forest management, land ownership and the previous occurrence of fire as the factors affecting the amount for forestry insurance. On the other hand, the multi-nomial results indicate the previous occurrence of fire, gender, forest size, income and risk aversion significantly influenced the choice for forestry insurance types, namely named peril and multi-peril.Originality/valueSeveral studies exist for forestry insurance in the developed countries. However, in West Africa specifically, Ghana, studies on forestry insurance appear to be non-existent. Above and beyond, this study, therefore, adds to the paucity of research on forestry insurance in Ghana and serves as a framework for agricultural insurance institutions such as the Ghana Agricultural Insurance Pool (GAIP) and World cover and other agricultural insurance institutions globally.

Forest Insurance for Natural Events: An Overview by Economists

“…The first articles in the database are [45] and [47]. However, the literature also covers other countries such as Spain [23], Italy [25], China [21,29,36], Sweden [44], Slovakia [8,46], Germany [16,33], Ghana [38], Brazil [24,40], Portugal [17], Honduras [42,43], Japan [50], France [19,22,30], Switzerland [35,53] and New Zealand [6]. At the continental level, 13 articles related to Europe, 4 to Asia, 9 to North America, 4 to South America, 1 to Oceania and 1 to Africa.…”

Trade credit from agrochemical vendors as an alternative source of finance for cabbage producers in the Bono East Region of Ghana

“…The result is suggestive that cabbage producers are economically active. Accordingly, Mensah et al (2021) indicated that the age cohort for Ghana's economically active age ranges 15-64 years implying that, cabbage producers are willing and able to work assiduously for ultimate profit. More so, cabbage production is coupled with that of tomato in the study site which reflects their sense of youthful exuberance.…”