Influential factors shaping cocoa farmers' crop insurance participation and coverage amount in Ghana

The Ghanaian cocoa sector faces numerous challenges which contributes to lower yields, forcing farmers to depend on traditional coping strategies due to the absence of institutionalized cocoa crop insurance. The effectiveness of these traditional risk-coping strategies remains uncertain. This study aims to identify the influential factors shaping cocoa farmers' decisions to participate in insurance schemes and the premium amounts they can afford. Using multi-stage random sampling, a semi-structured questionnaire was used to illicit responses from 240 cocoa farmers in the Western North region. A binary logistic and a multinomial logistic models were used for data analysis. Age, education, experience, credit access, and off-farm income were identified as statistically significant factors influencing farmers' decisions to participate in the insurance scheme. Moreover, among the 3 price contracts, multinomial results indicate that the majority of farmers (50.4%) favoured a premium/acre of GH¢250 for a minimum price insurance contract of GH¢1300 per annum. The multinomial log-odds determining the amount farmers are willing to pay are influenced by age, education, and off-farm income. Despite the sector's inherent challenges, there should be opportunities for collaboration between government agencies, insurance companies, and agricultural stakeholders aimed at improving insurance accessibility and affordability for cocoa farmers, thereby enhancing the sector's resilience against various risks.