Smallholder Maize Farmer’s Willingness to Join Index Insurance in Vhembe District: Limpopo Province
Keywords:
Index-Insurance, smallholder farmers, willingness to join, Vhembe districtAbstract
Only a negligible proportion of smallholder farmers in South Africa have crop insurance to mitigate production risks. This article analyses the demand for index-based crop insurance by smallholder farmers in the Vhembe district of Limpopo Province in South Africa based on their willingness to join a proposed insurance product. Questionnaires were used to collect once-off data from smallholder farmers. The contingent valuation method was used to analyse the willingness to buy a crop insurance product. Analysis revealed that 86% of the farmers were willing to purchase index-based crop insurance. Further analysis using the Probit regression model found that age, farm size, and risk management strategies such as government assistance and crop diversification influenced smallholder farmers` willingness to join the proposed crop insurance products. This study has shown that smallholder crop farmers` willingness to join crop insurance is high in the Vhembe district. The study recommends awareness and education concerning crop insurance purchases for smallholder farmers.
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Copyright (c) 2023 H. Mukwevho, U. Luvhengo, S.S. Letsoalo, J.N. Lekunze
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