An analysis of farmers’ preferences for crop insurance: a case of maize farmers in Swaziland
Date
2023
Authors
Mbonane, Nobuhle Duduzile
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
Agriculture is an important sector in sub-Saharan Africa, serving as a stimulus for growth and
the provision of food security, and assisting in poverty reduction (Food and Agricultural
Organization (FAO), 2000). However, food insecurity and poverty remain pressing issues in
the sub-Saharan region. According to Cervantes-Godoy et al. (2013), the reasons for food
insecurity and poverty are the susceptibility of agriculture to production, policy and price
risks which impact farmers’ income and welfare. The smallholder agricultural sector in many
countries is the largest contributor to rural economies and to the livelihoods of the majority of
the population (FAO, 2005).
Agricultural production is subject to various risks, including drought, outbreaks of disease
and floods, among others. Climate change is also one of the predominant sources of
production risks (Ramiro, 2009). Such risks are experienced by farmers in both developing
and developed countries, but they frequently have different consequences in different places
(World Bank, 2005). They can influence production choices, agricultural production or farm
incomes and can subsequently affect the livelihood of people dependent on agriculture.
Furthermore, they may impede future investments and the growth of agricultural businesses.
It is therefore imperative to gain a detailed understanding of how these risks affect
agricultural production and how they can be mitigated.
Smallholder farmers often face challenges caused by uncertain weather conditions, insecure
land ownership and restricted access to capital and other farm inputs. Considering the risks
associated with agricultural production, banks are unlikely to lend to farmers in disaster prone areas if the shocks can, potentially, result to loan defaults (The Guardian, 2014).
Improving smallholder maize production is a vital strategy in addressing the roots of poverty
and food insecurity.