Adoption and preferences for coffee drought index-based insurance in Uganda

Marcel van Asseldonk*, David Muwonge, Immaculate Musuya, Moses Abuce

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Micro-insurance can be an effective approach to smoothening income in adverse times and potentially a way to contribute to the financial inclusion of vulnerable populations. However, direct sales to individual smallholders remains a challenging task without an easily scalable solution. The current research seeks to find the determinants of adoption of a stand-alone coffee index-based insurance product in Uganda marketed by a farmer cooperative, and elicited preferences for improving the design and delivery model. A stratified household survey was conducted among 614 farmers, of which 40% adopted insurance and 62% were member of a farmer cooperative. In odds ratio terms, adopters perceived themselves to be 3.09 times more likely to receive a pay-out than non-adopters (P<0.01), and those having better access to extension services were 2.47 times more likely to adopt a policy (P<0.01). Yet farmers perceiving the design as complex were approximately half as likely to adopt (P<0.05). Farmers preferred the option of premium payments proceeds on delivery, mobile premium payments and deliver-ing insurance through cooperatives/associations. Deepening insurance uptake among coffee farmers will therefore require a strong focus on communication and information sharing facilitated by cooperatives/associations (e.g. farmer cooperates, village and saving associations, or women’s associations).

Original languageEnglish
Pages (from-to)162-166
Number of pages5
JournalStudies in Agricultural Economics
Volume122
Issue number3
DOIs
Publication statusPublished - 12 Aug 2020

Keywords

  • Adoption
  • Crop insurance
  • Index-based
  • Preference

Fingerprint Dive into the research topics of 'Adoption and preferences for coffee drought index-based insurance in Uganda'. Together they form a unique fingerprint.

Cite this