Determinants of Cocoa ( Cacao Theobroma ) Farmers Uptake of Crop Insurance: Evidence from Ekiti State

Olatomide Olowa and Omowumi Ayodele Olowa
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Omowumi Ayodele Olowa: Department of Agricultural Education Federal College of Education (Technical) Akoka P. O. Box 269 Yaba, Lagos,Nigeria

Journal of Agriculture and Crops, 2020, vol. 6, issue 7, 96-104

Abstract: Cocoa farmer faces increasing challenging environment through exposure to risks factors which have impacted negatively on their production or output. Since farmers are primary producers and often times lack capacity to control risks factor, it is important to manage this factors. This study examines the cocoa farmers’ risk preferences and crop insurance perception and isolates the drivers of decision to uptake crop insurance among cocoa farmers in Ekiti state. The sample for the study consist of 200 cocoa farmers who were household heads selected through multi-stage sampling across four Local government areas of Ekiti State who are predominantly cocoa producers. Data collected on socio-demographic characteristics, perception of crop insurance and risk preferences, were analyzed using descriptive statistics and binary logistic model. Results showed that majority of the cocoa farmers were without crop insurance, with higher enrolment in Membership of cooperative society, owned their land, larger household size and lower educational level but higher level of farm experience when compared to cocoa farmers who are holding crop insurance. Farmers risk preferences showed no significant difference between farmers with or without insurance. Education (?=0.59), Household size (?=0.0029) and Debt use (?=0.02), Membership of cooperative (?=-4.53), Farming Experience (?=-2.51), Owned Land (?=-2.19) and Non-Farm Income (?=-0.65) were among the significant determinants of insurance uptake. Risk mitigating measures such as provision of necessary incentives such as improved varieties of cocoa seedling, as well as provision of fertiliser and approved pesticides, financial assistance, and simple processing technologies that produce standard cocoa bean plus a re-jigged Nigeria Agricultural Insurance Corporation (NAIC) for an improved discharge of its function are recommended.

Keywords: Cocoa farmers; Crop insurance; Risk preferences; Risk management; Ekiti state (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:arp:jacarp:2020:p:96-104

DOI: 10.32861/jac.67.96.104

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