No.230 Risk Management for Smallholder Farmers: An Empirical Study on the Adoption of Weather-Index Crop Insurance in Rural Kenya

  • #Working Papers

This study examines the determinants of smallholder farmers’ adoption of weather-index crop insurance, which is considered to be a promising means of mitigating the negative welfare impacts of crop loss caused by drought or excess rainfall. The study utilizes household survey data covering 495 smallholder farmers in rural Kenya. It finds that a better understanding of insurance, together with a significant positive effect of years of education, considerably increases insurance uptake. The evidence suggests that it is important to provide educational programs on new financial products when introducing such products to smallholder farmers. However, it also shows the limitations of this study by revealing how important proper study design is to draw reliable methodological impact evaluations.

Keywords: agriculture, weather risk, weather-index insurance, rural households, Kenya.

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Author
Fukumori Keiko, Arai Ayumi, Matsumoto Tomoya
Date of issuance
March 2022
Language
English
Number of pages
37 page
Related areas
  • #Africa
Topics
  • #Agricultural / Rural Development
Research area
Economic Growth and Poverty Reduction
Research project

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