National Academy of Agricultural Sciences (NAAS)
|
PRINT ISSN : 2319-7692
Online ISSN : 2319-7706 Issues : 12 per year Publisher : Excellent Publishers Email : editorijcmas@gmail.com submit@ijcmas.com Editor-in-chief: Dr.M.Prakash Index Copernicus ICV 2018: 95.39 NAAS RATING 2020: 5.38 |
Premium paid in the name of floods and droughts to insurance outfits can provide compensation for consequences of excessive rainfall or lack of it and act to reduce vulnerability and facilitate recovery. As such, livelihoods insurance against the two weather challenges in the semi-arid regions offers a form of risk management for protection from uncertain loss by transferring risk from the policy holder to an insurance outfit. However, there exists a chronic lack of insurance coverage among the smallholder farmers in the area recognized by economists and agricultural experts as an institutional failure rather than a lack of desire by the farmers themselves. The aspect reflects a critical gap in providing accessible financial safety nets for vulnerable livelihoods. This study was set to identify the institutional drawbacks in enticing the people in the dry regions to insure their livelihoods. A case study of the Kyatune-Ikanga Ward of Kitui County, Kenya was taken and structured questionnaires administered to 50 households in the month of March 2026. According to respondents, the failure of institutions to bridge the livelihoods insurance gaps effectively stems from several deeply entrenched structural issues that include high transaction costs versus low premiums (28%), market and institutional constraints (24%), and inaccessible product designs (20%). Others are information asymmetry and moral hazard (10%), lack of a unified policy (10%), and product complexity (8%). The study recommends inclusion of livelihoods insurance education to farmer capacity building packages and partcipatorily developing insurance packages that are location and livelihood specific.
Adepoju, O.; Esan, O.; Akinyomi, O. (2022) Food security in Nigeria: Enhancing workers’ productivity in precision agriculture. Journal of Digital Food Energy Water Systems, 3, 13-27.
Aguiton, S.A. (2020) A market infrastructure for environmental intangibles: The materiality and challenges of index insurance for agriculture in Senegal, Journal of Cultural Economy 14(5): 580–595.
Alam, A.S.A.F.; Begum, H.; Masud, M.M.; Al-Amin, A.Q.; Leal Filho, W. (2020) Agriculture insurance for disaster risk reduction: A case study of Malaysia. International Journal of Disaster Risk Reduction, 47, 101626.
Arrow, K.J. (1963) Uncertainty and the welfare economics of medical care, American Economic Reviews, 53, 941–973.
Association of Kenya Insurers (2018) AKI Insurance Industry Annual Report 2018. Nairobi:
Balana, B.B.; Oyeyemi, M.A. (2022) Agricultural credit constraints in smallholder farming in developing countries: Evidence from Nigeria, World Development Sustainability, 1, 100012.
Barratt, J.; Kath, J.; Mushtaq, S.; Collins, B.; Chenu, K.; Christopher, J.; An-Vo, D.A. (2025) Strategic use of index-based frost insurance to reduce financial risk and improve income stability for wheat producers in Australia, Agricultural Systems, 226, 104306.
Bernards N (2020) ‘Latent’ surplus populations and colonial histories of drought, groundnuts, and finance in Senegal, Geoforum 126: 441–450.
Birthal, P.S.; Hazrana, J.; Negi, D.S.; Mishra, A.K. (2022) Assessing benefits of crop insurance vis-a-vis irrigation in Indian agriculture. Food Policy, 112, 102348.
Cai, J. (2016) Agricultural insurance and its role in risk management for smallholder farmers. China Agricultural Economic Review, 8, 423–440.
Carter, M.R.; Cheng, L.; Sarris, A. (2016) Where and how index insurance can boost the adoption of improved agricultural technologies, Journal of Development Economics, 118, 59–71.
Central Bankof Kenya (2019) FinAccess Household Survey 2019, Nairobi.
Chai, Z.H.; Ren, J.; Li, S.N. (2025) Effects of Agricultural Insurance on the Labor Allocation of Farmers, J. Agrotech. Econ., 5, 88–106.
Chambers, R.; Conway, G. (1992) Sustainable rural livelihoods: Practical concepts for the 21st century. In IDS Discussion Paper; Institute of Development Studies: Brighton, UK; Volume 296.
Chantarat, S., Mude A.G. and Barrett, C.B. (2009) Willingness to Pay for Index Based Livestock Insurance: Results from a Field Experiment in Northern Kenya, Working Paper, Ithaca: Cornell University.
Coble, K.H.; Barnett, B.J. (2013) Why Do We Subsidize Crop Insurance? American Journal of Development Economics, 95, 498–504.
D’Alessandro, S. (2015) Agriculture Global Practice Note, Word Bank Group
Dahlin, A.S.; Rusinamhodzi, L. (2019) Yield and labor relations of sustainable intensification options for smallholder farmers in sub-Saharan Africa: A meta-analysis, Agronomy for Sustainable Development, 39, 32.
Dercon, S.; Bold, T.; Calvo, C. (2008) Insurance for the poor? In Social Protection for the Poor and Poorest: Concepts, Policies and Politics; Palgrave Macmillan: London, UK,; pp. 47–63.
Ernest & Young (2016) Insurance Opportunities Sub-Saharan Africa. Nairobi: Ernest & Young.
Farrin, K.; Miranda, M.J. (2015) A heterogeneous agent model of credit-linked index insurance and farm technology adoption, Journal of Development Economics, 116, 199–211.
Farrin, K.; Miranda, M.J. (2015) A heterogeneous agent model of credit-linked index insurance and farm technology adoption, Journal of Development Economics, 116, 199–211.
Gao, Y.; Shu, Y.; Cao, H.; Zhou, S.; Shi, S. (2021) Fiscal policy dilemma in resolving agricultural risks: Evidence from China’s agricultural insurance subsidy pilot, International Journal of Environmental Research and Public Health, 18, 7577.
Genius, M.; Koundouri, P.; Nauges, C.; Tzouvelekas, V. (2014) Information transmission in irrigation technology adoption and diffusion: Social learning, extension services, and spatial effects. American Journal of Agricultural Economics, 96, 328–344.
Greatrex, H.; Hansen, J.; Garvin, S.; Diro, R.; Blakeley, S.; Le Guen, M.; Rao, K.; Osgood, D. (2015) Scaling up Index Insurance for Smallholder Farmers: Recent Evidence and Insights; CCAFS Report; CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS): Copenhagen, Denmark.
Holling, C.S. (1973) Resilience and stability of ecological systems, Annual Review of Ecology and Systematics, 4, 1-23.
Hungerford, A.; O’Donoghue, E. (2016) Federal crop insurance options for upland cotton farmers and their revenue effects. United States Department of Agriculture Economic Research Services, 3, 110–135.
Institute of Economic Affairs Kenya. (2020) Institute of Economic Affairs, Kenya.
Janzen, S.A.; Carter, M.R.; Ikegami, M. (2021) Can insurance alter poverty dynamics and reduce the cost of social protection in developing countries? J. Risk Insurance, 88, 293–324.
Joffre, O.M.; Castine, S.A.; Phillips, M.J. (2017) Senaratna Sellamuttu, S.; Chandrabalan, D.; Cohen, P. Increasing productivity and improving livelihoods in aquatic agricultural systems: A review of interventions. Food Security, 9, 39–60.
Joffre, O.M.; Castine, S.A.; Phillips, M.J.; (2017) Senaratna Sellamuttu, S.; Chandrabalan, D.; Cohen, P. Increasing productivity and improving livelihoods in aquatic agricultural systems: A review of interventions, Food Secur., 9, 39–60.
Johnson L (2021) Paying ex gratia: Parametric insurance after calculative devices fail. Geoforum 125: 120 131.
Johnson L, Wandera B, Jensen N, et al., (2019) Competing expectations in an index-based livestock insurance project, Journal of Development Studies 55(6): 1221–1239.
Johnson, L (2020) Sharing risks or proliferating uncertainties? Insurance, disaster and development. In: Scoones, I and Stirling, A (eds) The Politics of Uncertainty, London: Routledge, pp.45–57.
Joyce, M.; Singh, A. (2025) Income uncertainty, precautionary wealth, and social insurance, European Economic Review, 175, 105003.
Kahneman, D.; Tversky, A. (1979) Prospect theory: An analysis of decision under risk. Econometrica, 47, 263–292.
Liu, W.; Li, J.; Ren, L.J.; Xu, J.; Li, C.; Li, S.Z. (2020) Exploring livelihood resilience and its impact on livelihood strategy in rural China, Soc. Indic. Res., 150, 977–998.
Ma, Q.; Zhou, Y.; Wang, J. (2024) The impact of climate change on credit risk of rural financial institutions: A threshold effect based on agricultural insurance, The North American Journal of Economic Finance, 71, 102086.
Madaki, M.Y.; Kaechele, H.; Bavorova, M. (2023) Agricultural insurance as a climate risk adaptation strategy in developing countries: A case of Nigeria. Climate Policy, 23, 747–762.
Martine, V.; Hafsah, J.; Kerri, B. (2020) Risk preferences and poverty traps in the uptake of credit and insurance amongst small-scale farmers in South Africa. Journal of Economic Behavior Organization, 180, 826–836.
Mazur, K. (2023) Sharing risk to avoid tragedy: Informal insurance and irrigation in village economies, Journal of Development Economics, 161, 10303.
Miranda, M.J.; Glauber, J.W. (1997) Systemic Risk, Reinsurance, and the Failure of Crop Insurance Markets. American Journal of Agricultural Economics, 79, 206–215.
Narayanan, A.; Tomar, S. (2023) Farm support and market distortion: Evidence from India. American Journal of Agricultural Economics, 105, 966–993.
Noritomo, Y.; Takahashi, K. (2020) Can insurance payouts prevent a poverty trap? Evidence from randomised experiments in northern Kenya. Journal of Development Studies, 56, 1079–1096.
Obi, L. (2020) Daily Nation, 2020, January 1, Nation Media Group.
Pettinger, T. (2015) Missing Markets, Economics: Helping to Simplify Economics,
Pratiwi, N.; Karuniasa, M.; Suroso, D. (2018) Self-organization and crop insurance to enhance livelihood resilience: A case of rice farmers in Cirebon Regency, Indonesia. ASEAN J. Community Engagement, 2, 1.
Rana, R.H.; Adeyinka, A.A.; Mushtaq, S.; Barratt, J.; Alam, K. (2024) The impact of agricultural insurance on farmers’ mental health: What we can learn from the literature. Environment Development and Sustainability, 1–18.
Scoones, I and Stirling, A (2020) The Politics of Uncertainty: Challenges of Transformation, New York: Routledge.
Sina, S. (2019) A conceptual framework for measuring livelihood resilience: Relocation experience from Aceh, Indonesia, World Development, 117, 253–265.
Skees, J.R.; Reed, M.R. Rate (1986) Making for Farm-level Crop Insurance: Implications for Adverse Selection. American Journal of Agricultural Economics, 68, 653–659.
Speranza, C.I.; Wiesmann, U.; Rist, S. (2014) An indicator framework for assessing livelihood resilience in the context of social-ecological dynamics. Glob. Environ. Change, 28, 109–119.
Statista (2019) Life and non-life insurance penetration in selected countries and territories worldwide in 2024, Statista.
Stoeffler, Q.; Carter, M.; Guirkinger, C.; Gelade, W. (2022) The spillover impact of index insurance on agricultural investment by cotton farmers in Burkina Faso. World Bank Economic Review, 36, 114–140.
Wanzala, R.W.; Marwa, N.; Lwanga, E.N. (2024) Impact of agricultural credit on coffee productivity in Kenya. World Development Sustainability, 5, 100166.
Wen, S.; Xiao, Q.; Li, J.; Li, J. (2023) The impact of agricultural insurance on urban–rural income gap: Empirical evidence from China, Agriculture, 13, 1950.
Wu, H.; Li, J. (2023) Risk preference, interlinked credit and insurance contract and agricultural innovative technology adoption. Journal of Innovation and Knowledge,8, 100282.
Wu, H.; Li, J. (2023) Risk preference, interlinked credit and insurance contract and agricultural innovative technology adoption, Journal of Innovation and Knowledge, 8, 100282.
Yi, F.M. (2021) Digital Skills, Livelihood Resilience and Sustainable Poverty Reduction in Rural Areas, Journal of South China Agriculture University,20, 1–13.
Citations
|
|
|
