Assessment of Poultry Farmers’ Willingness to Pay for Agricultural Insurance in Osun State, Nigeria

Although poultry farming constitutes a significant component of the agricultural and household economy in the developing world, it is largely undertaken in an environment of risk and uncertainty, hence the need for poultry farmers to guard against risk by purchasing agricultural insurance. In order to analyse the willingness of poultry farmers in Osun State, Nigeria to purchase agricultural insurance cover, a multi-stage sampling technique was employed to select a total of 140 poultry farmers. Descriptive statistics were used to assess poultry farmers’ awareness of agricultural insurance. To determine the willingness of poultry farmers to purchase agricultural insurance cover, the Contingent Valuation Method (CVM) was used, whereas a binary logistic regression model was employed to determine the factors that significantly influence poultry farmers’ willingness to pay for agricultural insurance. The results of the study reveal that a considerable proportion of the surveyed respondents had not been aware of agricultural insurance prior to the time the survey was conducted. Although only 7.1% of the respondents indicated that their poultry farms are already insured, a substantial share of poultry farmers in the study area stated that they were willing to purchase agricultural insurance cover. Experience in poultry farming, the number of birds stocked, the primary occupation of the respondent and prior knowledge of agricultural insurance were the factors that exerted a significant influence on poultry farmers’ willingness to pay for agricultural insurance cover. It can be concluded that, among other things, there is a need for a synergistic partnership between farmers, insurance companies and government. Primarily, the government needs to increase the present level of subsidy granted for livestock insurance cover so as to keep the price of premiums within a range that poultry farmers can afford.