Crop index insurance as a tool for climate resilience: lessons from smallholder farmers in Nigeria

Ifedotun Aina, Opeyemi Ayinde, Djiby Thiam and Mario Miranda
Additional contact information
Opeyemi Ayinde: University of Ilorin
Djiby Thiam: University of Cape Town
Mario Miranda: Ohio State University

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, 2024, vol. 120, issue 5, No 33, 4828 pages

Abstract: Abstract Crop farmers in arid and semi-arid regions face a covariate risk that is of paramount importance, namely, the threat of catastrophic crop loss triggered by natural disasters and climate hazards. Such an occurrence not only jeopardizes the livelihoods of these farmers but may also lead to persistent poverty. Promoting sustainable development requires control over climate-related shocks, which negatively affect the most vulnerable population in the developing world. This study investigates the option of choosing crop area-yield index insurance to mitigate the adverse effects associated with climate stress. In addition, we assessed the amount farmers are willing to pay for an insurance product that insures yields below 70% of the local average in the study area. Our results show that access to extension services and economic association membership offers farmers social capital and encourages their decision to purchase index insurance. We also find that the long-run welfare impact of index insurance policy on vulnerable households could be significant as an alternative insurance mechanism to traditional insurance. This study contributes to filling the gaps on the uptake of index insurance and provide guidance to policymakers in their approach to mitigating the effects of climate change on crop production in Nigeria.

Keywords: Index insurance; Crop production; Climate risk; Adaptation strategy; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11069-023-06388-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:nathaz:v:120:y:2024:i:5:d:10.1007_s11069-023-06388-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11069

DOI: 10.1007/s11069-023-06388-x

Access Statistics for this article

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards is currently edited by Thomas Glade, Tad S. Murty and Vladimír Schenk

More articles in Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards from Springer, International Society for the Prevention and Mitigation of Natural Hazards
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().