FACTORS INFLUENCING THE ADOPTION OF AGRICULTURAL INSURANCE AMONGSMALLHOLDER FARMERS IN NIGER AND KADUNA STATES, NIGERIA

Abstract

Agricultural production activities are faced with a myriad of risks and uncertainties which require
insurance as a risk management tool. The research work was carried out to investigate the adoption
of agricultural insurance among small holder-farmers in the study area. This was done through
examining: the socio-economic characteristics of the respondents; the perception of the respondents
towards agricultural insurance; the key factors influencing the uptake of agricultural insurance
among smallholder farmer and the constraints affecting the rate of adoption of agricultural insurance
among the respondents. A random sampling procedure was adopted to select 240 respondents across
Kaduna and Niger states. The data were collected with a well-structured questionnaire. Descriptive
statistics and inferential analyses such as regression analysis were employed to analyze the data. The
research work revealed that the age of respondent farmers has a majority of (54.2%) of greater than
35 years, 31.3% are between 29-35 years while 14.6% are of under 29 years, majority of the
respondents (63.7%) are male while 36.3% are females. majority of the respondents (65.8%) have
farms between 1-3 hectares, 30% have farms less than 1 hectare, while the least (1.3%) have more
than 6 hectares. The main crops cultivated by the respondents are maize (49.6%), followed by rice
(28.3%), soybean (10.4%), and yam (5%). The main source of information on agricultural insurance
from the study is from extension agents (31.7%) followed by government programs (20.6%), media
(14.3%) and fellow farmers (12.7%). Most of the respondents (50%) understand the benefits of
agricultural insurance, 43.8% of the respondents do not understand the benefits while 6.2%
somewhat understand the benefits of agricultural insurance. Most respondents (35.4%) had a
moderate understanding of agricultural insurance, with few demonstrating a high level of awareness.
Furthermore, a majority (75%) had never attended any training or awareness program on
agricultural insurance, whereas just 20% had received such exposure. In terms of coverage, 81.75%
of the farmers reported not having any agricultural insurance, with only 18.25% currently covered.
Regarding the types of insurance accessed, 44% of the respondents were covered under livestock
insurance, 40% had crop insurance, and only 4% were enrolled in weather-related insurance
schemes. The regression analysis revealed that age, education, and sex significantly influenced
agricultural insurance uptake, with older and more educated farmers more likely to adopt, while
males were less likely than female. The study concludes that agricultural insurance is significantly
underutilized due to low awareness, poor training, and limited accessibility. Improved extension
services, targeted awareness campaigns, and more inclusive insurance schemes are recommended to
enhance adoption among smallholder farmers.