Bundling of Insurance with Agricultural Inputs: A Better Way of Introducing Insurance Product to Farmers

AshEse Journal of Agricultural Science                                                                 

Vol. 3(2), pp. 107-113, July, 2020

ISSN: 2059-1225  

© 2020 AshEse Visionary Limited 

http://ashese.co.uk/agricultural-science1/blog

 

Full Length Research

Bundling of Insurance with Agricultural Inputs: A Better Way of Introducing Insurance Product to Farmers

Samuel Oluwafemi Adeoti*, Agunbiade Moses, and Ajayi Mary Adedamola

Obafemi Awolowo University (OAU) Ile-Ife, Osun State, Nigeria.

*Corresponding author. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.. Tel/Mobile: +2347068447002.

 

Received June 2020; Accepted June 2020

 

Farmers in Nigeria are exposed to multiple agricultural risks, which require various adaptation strategies. Agricultural insurance is capable of supporting farmers in coping with adverse effects of risks. This study examined how bundling provides more value for all actors in agricultural value chain.Both primary and secondary data were used for the study. The primary data were collected through administration of well-structured questionnaires and random selection of 30 grain farmers (cereals and legumes farmers) as well as interview with a few agricultural insurance stakeholders. Secondary data were sourced from different organization and company’s websites through a thorough desk review. Data collected were analyzed using descriptive statistics and bundling matrix. This study revealed that only seven (7) out of 57 insurance companies were licensed by NAICOM. Results of bundling matrix revealed that none of the respondent was qualified to purchase the insurance product as a single product based on the prices even though they were willing to pay for the insurance product. Seventy percent (70%) of respondents would have the capacity to obtain an insurance package for their grain farms with the bundling of fertilizer and the agricultural insurance package while only 23.33% would be able to obtain an insurance package by the bundling of the insurance package with herbicides. In addition, 66.67% of the respondents would be able to obtain an insurance package for their grain farms by bundling yield insurance, fertilizer and herbicide together.  Findings from this study revealed that bundling agricultural insurance with some agricultural inputs would increase the uptake of agricultural insurance by agricultural value chain actors and increase the sale turnover of input suppliers. The study recommended that the bundling of agricultural insurance products with agricultural inputs should be encouraged as it is a good way of increasing the awareness and uptake of agricultural insurance among farmers in Nigeria. Both the insurance companies/stakeholders and agricultural input suppliers need to work together to reach a reasonable bundling discount for profitable bundling prices.

Key words:Agricultural risk, agricultural insurance, bundling, agricultural value chain.

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