Influence of socio-economic factors on the adoption of weather-based agricultural insurance products in Narok County, Kenya
Date
2023
Authors
Nanshemeza, H.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Kenya has been facing a high number of natural disasters, having recorded various droughts in the last two decades. These are consequences of climate change. To mitigate the adverse impacts of this climate uncertainty, the government avers that farmers need to adopt various coping strategies. Among these is agricultural insurance, which is supposed to help low-income farmers reduce vulnerability. However, despite policies and initiatives being implemented to encourage farmers to adopt these insurance products, uptake remains low. The focus of this research was to investigate the influence of socio-economic factors on the uptake of weather-based agricultural insurance products in Narok County. The study specifically examined the effect of demographic factors, household income, household perception, household expectation, and crop insurance regulation on the uptake of weather-based agricultural insurance products in Narok County. The research was grounded on prospect theory and customer perceived value theory. A sample of 300 wheat farmers in Narok County was considered for the research. A structured research questionnaire was adopted for the examination with probit regression estimated to determine the marginal effects of socio-economic factors on the uptake of weather-based agricultural insurance products in Narok County. Analysis revealed that a majority, 53% (n = 159), were male farmers, with 47% accounting for female wheat farmers, which demonstrates inclusive participation in agricultural activities. The results revealed that, on average, the farmers had an income of KES 16,843 from farming activities. The research further focused on the rate of adoption of weather-based insurance products and the findings showed that 48% (n = 144) of the farmers have used weather index crop insurance, with 52% not using the product. The summary of the probit regression established that there was a positive but insignificant influence of 2.14% on the adoption of weather-based insurance products in Narok County that was predicted by the socio-economic factors. Overall, the research findings were that socio-economic factors do not have significant effects on the adoption of weather-based insurance products in Narok County. The first recommendation that can be drawn from the research findings is that the government needs to be more involved in the efforts to address the challenges facing agricultural insurance. The study also recognizes the role played by insurers in promoting crop insurance and the study recommends that insurers do more research on farmers’ needs and their perception about insurance. Finally, this study calls on the government to step up education efforts and partnerships with local and international partners to provide up-to-date insurance education programmes for farmers and training for insurance experts.
Description
Full-text thesis
Keywords
Citation
Nanshemeza, H. (2023). Influence of socio-economic factors on the adoption of weather-based agricultural insurance products in Narok County, Kenya [Strathmore University]. http://hdl.handle.net/11071/15420