African Journal of
Agricultural Research

  • Abbreviation: Afr. J. Agric. Res.
  • Language: English
  • ISSN: 1991-637X
  • DOI: 10.5897/AJAR
  • Start Year: 2006
  • Published Articles: 6530

Full Length Research Paper

Household welfare status and crop insurance uptake by cocoa farmers in Ondo State, Nigeria

Balogun T. Olabanji
  • Balogun T. Olabanji
  • Department of Agricultural Economics, Faculty of Agriculture, University of Ibadan, Nigeria.
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Olajide O. Adeola
  • Olajide O. Adeola
  • Department of Agricultural Economics, Faculty of Agriculture, University of Ibadan, Nigeria.
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Thomas A. Kehinde
  • Thomas A. Kehinde
  • Department of Agricultural Extension and Rural Development, Faculty of Agriculture, University of Ibadan, Nigeria.
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  •  Received: 28 April 2021
  •  Accepted: 22 June 2021
  •  Published: 31 July 2021

Abstract

This study examined the effect of welfare status on insurance uptake. The reason for the study is that formal insurance is still underutilized amongst farmers in Nigeria despite the incessant risk and uncertainties faced in agriculture. For this study, 200 households were randomly drawn from four local government areas of Ondo state through a 2-stage sampling technique. The analytical tools used were descriptive statistics and the Heckman selection model. The result obtained from the study showed that the risk coping strategies adopted by cocoa farmers in the study area included the use of pesticides, herbicides and manual weeding of their farms. Insurance awareness was low among cocoa farmers in the study area. Also, factors that influenced farmers’ decision to take insurance were years of formal education, distance of household from insurance company, access to extension agent and total land cultivated. Household size which was used as instrumental variable for welfare status was also significant in the model influenced farmers’ decision to take crop insurance.

Key words: Heckman selection model, cocoa, risk, welfare, crop insurance.