Document Type: Original Article


McGill University


Crop insurance is a risk management tool with the potential of dealing with risk more efficiently, the study uses a dichotomous contingent valuation method to elicit the willingness to pay for crop insurance among cereal farmers in the Eastern region of Ghana. The study employed descriptive statistical techniques to analyse primary data obtained from 208 sampled farmers in the region. Approximately, 52.9% of the farmers expressed interest in crop insurance. A Heckman two stage approach was employed to estimate the factors influencing the WTP for crop insurance. The results revealed that farmers were willing to pay approximately GHc 69.6 per cropping season. The demand for insurance was found to be negatively correlated with the premium amounts suggesting that it is a normal good. The Probit model revealed that marital status, education, borrowing, and awareness of crop insurance influenced farmers willingness to purchase insurance. Farmers WTP amount estimated with the interval regression model was shown to be influenced by key variables such as age, crop type, farm size, farm experience, income, weather variation, savings and access to extension agents. Innovative insurance products and the appropriate distribution channels are also recommended to incite demand for crop insurance.

Graphical Abstract


Investigates the demand for crop insurance in a developing country context, in the Eastern region of Ghana.

The current GAIP insurance rate is higher than the amount cereal farmers in the Eastern region are willing to pay.

Farmers’ ability to pay for crop insurance may thus discourage actual demand for insurance even if there is a higher willingness to participate in the program

Generally, cereal farmers who were willing to purchase and pay more for insurance were married, cultivated larger farms and had higher incomes.


Main Subjects

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