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Performance And Challenges Of Drought Insurance Contracts In Tanzania

Posted on:2016-06-02Degree:DoctorType:Dissertation
Country:ChinaCandidate:Phillip Daniel DaningaFull Text:PDF
GTID:1109330461489571Subject:Agricultural Economics and Management
Abstract/Summary:PDF Full Text Request
This study aimed at assessing the performance and challenges of the drought insurance pilot program in Bunda district three years after it was introduced in the area in 2011. The specific objectives of this study were(i) to determine precisely how the drought insurance works in practice.(ii) To assess the factors that affect farmers’ attitude towards drought insurance(iii) to explore the determinants of holding the drought insurance in the area of study and(iv) to assess the sustainability of drought insurance pilot program in the study area. Focus groups were used to assess farmer’s risks and depict how the program works. Farmers’ attitude towards drought insurance was assessed using Factor analysis and Cronbanch’s alpha for reliability test. Understanding the factors influencing farmers’ holding of drought insurance contract was done using Logistic regression analysis. Ordinal regression statistical technique was employed to model the relationship between variables in the market force factors and the dependent variable to determine the explanatory variables that influence farmers’ willingness to proceed with the drought insurance contracts. Findings revealed that the program is a drought insurance that is run in form of contract farming with majority of farmers being unfamiliar with much of implementation procedures. Compensation fairness was among factors that affected farmers’ attitudes towards drought insurance with majority of farmers expressing reluctance to proceed with insurance contract. Farm size, age, trust of insurers, experience in contract farming and satisfaction about drought insurance were found to be statistically significant factors that influenced farmers’ willingness to proceed with the drought insurance contract in a subsequent year. Conclusively, it was revealed that despite the challenges, drought insurance program for cotton growers in Bunda is mainly operated in a form of contract farming and farmers see it as a very essential tool in providing them with high value supply chains. This study recommends that, it is essential to enhance a thorough understanding of the program operationalization by the farmers for a successful program implementation. Farmers’ attitudes and perception should be incorporated in developing effective drought insurance in Tanzania. Farmers’ needs should be considered and adequately incorporated into technical arrangements of program implementation to improve participation of farmers in the drought insurance program. The government and partners should strive at finding proper ways to improving the terms and conditions of the insurance contracts so as to enable farmers realize the benefits of the scheme. Although the implementation of the drought insurance is still at its pilot stages, it is essential to consider and adequately incorporate farmers’ needs into the technicalities of program implementation in Tanzania that would see improvements of uptake of drought insurance in the country when the program advances into its full-fledged scheme. Efficiency by the private investors and government’s proper support will help farmers to realize risk reduction benefits of the program and ensure its sustainability.
Keywords/Search Tags:Drought insurance contracts, operationalization, attitudes, sustainability, Tanzania
PDF Full Text Request
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