Poultry Farms Risk Management by Insurance: Evidence from Ghana
Cosmos Adjei
School of Agriculture, Food and Rural Development, Newcastle University, Newcastle Upon Tyne NE1 7RU, UK
D. P. K. Amagashie
Department of Agricultural Economics and Agribusiness, University of Ghana, P.O.Box LG 68, Ghana
H. Anim-Somuah
Department of Agricultural Economics and Agribusiness, University of Ghana, P.O.Box LG 68, Ghana
Boahen Atta Oppong *
Department of Agricultural Economics and Agribusiness, University of Ghana, P.O.Box LG 68, Ghana
*Author to whom correspondence should be addressed.
Abstract
This study assessed poultry farmers’ decision to pay for poultry insurance in the Dormaa Municipality of Ghana, from a random sample of 100 commercial chicken producers. The paper employed the Contingent Valuation and Tobit models. The results showed that 72% of farmers are willing to pay GHS 31.00 or 3.10% on average of the chicken value of GHS 1000.00 ($263.52) to insure. Poultry farmers with multiple income sources tend to substitute insurance for other forms of occupation. The study found risk influence producers decision to insure because they have moderate frequency and impact. Prior experience with insurance, severity of disease serve as incentives for insurance and age serve as disincentive for agricultural insurance which require capacity building programmes to strengthen farmers demand for insurance whilst insurers take advantage of this potential market to sell viable insurance products.
Keywords: Moral hazard, adverse selection, risk averse, tobit, premium and claims