EconPapers    
Economics at your fingertips  
 

Weather Index Insurance, Agricultural Input Use, and Crop Productivity in Kenya

Kenneth W. Sibiko and Matin Qaim

No 256214, GlobalFood Discussion Papers from Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development

Abstract: Weather risk is a serious issue in the African small farm sector, which will further aggravate due to climate change. Farmers typically react by using low amounts of agricultural inputs. Low input use can help to minimize financial loss in bad years, but is also associated with low average yield and income. Increasing small farm productivity and income is an important prerequisite for rural poverty reduction and food security. Crop insurance could incentivize farmers to increase their input use, but indemnity-based crop insurance programs are plagued by market failures. This paper contributes to the emerging literature on the role of weather index insurance (WII). While a few studies have used experimental approaches to analyze WII impacts, research with observational data is scant. We use data from a survey of farmers in Kenya, where a commercial WII scheme has been operating for several years. Regression models with instrumental variables are used to analyze WII uptake and effects on input use and crop productivity. Results show that WII uptake contributes to higher use of chemical fertilizer and improved seeds, and thus also to higher yields. We conclude that upscaling WII programs may help to spur agricultural development in the small farm sector.

Keywords: Community/Rural/Urban Development; Farm Management; Risk and Uncertainty (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dev, nep-env and nep-ias
Date: 2017-04-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://ageconsearch.umn.edu/record/256214/files/Gl ... ion%20Paper%2094.pdf (application/pdf)

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:ags:gagfdp:256214

DOI: 10.22004/ag.econ.256214

Access Statistics for this paper

More papers in GlobalFood Discussion Papers from Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().

 
Page updated 2019-10-12
Handle: RePEc:ags:gagfdp:256214