Title:
ANALYSIS OF INSURANCE STRATEGIES MITIGATING FARMERS’ RISKS IN OGUN STATE, NIGERIA

Authors:
Owoeye, R. S*., Ojo Olutope Stephen, Odewale Tajudeen Opeyemi and Adeyemi O. Fatoki, Nigeria

Abstract:

The study analyzed the insurance strategies mitigating farmers risk in Ogun State, Nigeria. Data for the study were collected with the aid of pre-tested questionnaire through a multistage sampling technique, which culminated in the final selection of 90 respondents from the record of insured farmers obtained from the only NAIC office in Abeokuta North Local government in Ogun State. Descriptive statistics such as mean, percentages, frequencies, standard deviation, minimum and maximum value were used to analyze and describe the data on socio-economic characteristics of farmers that patronize NAIC, the insurance strategies available for farmers, the types of risk that farmers insured against and the challenges to agricultural insurance in Ogun State. Tobit regression model was used to determine how effective these strategies are to mitigate business risk of farmers. The mean age for the study was 43.4 years, mean year of educational acquisition was 13.9 years and the mean value of farming experience was 12.4 years. Also, most of the respondents were male, they were married and had average household size. The Tobit regression result on business risk of Log likelihood function (36.85308) showed that credit, number of labour and capital base with normalized coefficients of 1.17e-07, 0.0079835 and 3.63e-08 respectively were important variable that significantly had effect on business risks of respondents while other variables such as age, household size, educational level, farming experience, liabilities owed, asset owned, annual income and total farm size were not significant although they all met the a priori expectations. The study concluded that most of the insured farmers were faced with different challenges and they employed different strategies to mitigate the various kinds of risks encountered. The study recommends that government should implement agricultural policy on agricultural insurance which will help to enlighten farmers on the importance of agricultural insurance in detail.