Researchers from Swedish University of Agricultural Sciences Describe Findings in Agricultural Insurance (Revisiting Preferences for Agricultural Insurance Policies: Insights From Cashew Crop Insurance Development In Ghana): Agriculture – Agricultural Insurance

2023 AUG 25 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Current study results on Agriculture - Agricultural Insurance have been published. According to news reporting originating from Uppsala, Sweden, by NewsRx correspondents, research stated, “The development and uptake of agricultural insurance products by farmers in developing countries has been universally and disappointingly low. This paper investigates farmers’ preferences and willingness to pay for a variety of agricultural insurance products, including indemnity insurance, index insurance, benchmark insurance, and hybrid (indemnity-index) insurance in the Bono and Bono East Regions of Ghana.”

Our news editors obtained a quote from the research from the Swedish University of Agricultural Sciences, “We employed hybrid latent class and multiple indicators, multiple causes (MIMIC) models using discrete choice experimental data from 383 cashew growers. The results show that cashew farmers are heterogeneous in their preferences, with a majority advocating for agricultural insurance against key perils such as wildfires, high wind speed and excess rainfall. Hybrid (indemnity-index) insurance product is highly preferred and valued by cashew farmers advocating for agricultural insurance, followed by index insurance product. Farmers are quite sensitive to premiums, expected payout, type of perils covered by the insurance and loss assessment criteria. Social and behavioural constructs relating to trust in insurance companies, subjective knowledge about agricultural insurance, and perceived agricultural insurance benefits are significant determinants of farmers’ preferences for agricultural insurance products. The findings imply that it has become very necessary for agricultural insurance product developers, underwriters, and insurers in developing countries to gain more insight on farmers’ social and behavioural constructs related to agricultural risk, insurance knowledge and trust. We suggest that agricultural insurance product developers and policy-makers involved in agricultural insurance development should improve farmers’ understanding of basis risk and the concept of agricultural insurance, as well as the potential benefits of farm insurance.”

According to the news editors, the research concluded: “In this way, we can improve the uptake of agricultural insurance products by farmers in developing countries.”

This research has been peer-reviewed.

For more information on this research see: Revisiting Preferences for Agricultural Insurance Policies: Insights From Cashew Crop Insurance Development In Ghana. Food Policy, 2023;118. Food Policy can be contacted at: Elsevier Sci Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, Oxon, England. (Elsevier - www.elsevier.com; Food Policy - http://www.journals.elsevier.com/food-policy/)

The news editors report that additional information may be obtained by contacting Enoch Owusu-Sekyere, Swedish University of Agricultural Sciences, Dept. of Economics, Uppsala, Sweden. Additional authors for this research include Nicholas Oppong Mensah and Cosmos Adjei.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.foodpol.2023.102496. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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