Demand for Weather-Index Insurance among Selected Arable Crop Farmers in Guinea Savannah, Nigeria

This study examines the demand for weather-index insurance among selected arable crop farmers in guinea-savannah, Nigeria. Cross-sectional data were used for this study. A multistage sampling procedure was employed to select 320 respondents (Maize and Sorghum Farmers) for the study. The analytical tools used in the study are Descriptive statistics and a discrete choice analysis (Mixed Logit) Model. The choice experiment revealed a negative coefficient for the Alternative Specific contract (ASC), suggesting that the crop farmers in the study area had a positive attitude toward weather index insurance. The coefficient of premium rate also had a negative value which means farmers prefer low-price insurance contracts to higher-price insurance contracts when other insurance attributes are held constant. On average, farmers were willing to pay about 5.7 percent of their expected harvest for an insurance contract. This revealed that a moderate reduction in the premium paid by farmers could probably increase their choice of Weather Index Insurance (WII) significantly. Therefore, the premium rate should be made flexible and affordable to smallholder farmers.