Adoption and intensity of agricultural insurance coverage in rural Senegal

Purpose Farmers’ decisions to take up agricultural insurance are often shaped by deep-seated psychological and cognitive processes rather than purely economic considerations. This manuscript addresses an important gap in the literature by examining both farmers’ decisions to adopt agricultural insurance and the extent of their participation in insurance programs. Design/methodology/approach This study uses data from a nationally representative survey conducted in Senegal in 2017, covering 1,200 rural households engaged in dry cereal production. It employs an econometric framework that integrates logit, ordered logit and Heckman selection models to assess the influence of key determinants on insurance uptake. These include awareness of insurance products, trust in insurance providers, financial constraints, perceptions of climate-related risks and participation in cooperatives or agricultural extension services. Findings Agricultural insurance adoption remains relatively limited, with only approximately 30% of surveyed farmers subscribing to an insurance scheme. The findings indicate that awareness, educational attainment and access to credit constitute the primary drivers of insurance adoption. In addition, trust in insurers and prior exposure to climatic shocks significantly increases the likelihood of subscription. With respect to the level of coverage proxied by the insured amount in CFA francs, the highest elasticities are associated with farm size (+0.397 per logarithmic hectare), agricultural income (+0.034 per thousand CFA francs) and cooperative membership (+8.45). These findings underscore the complementary roles of financial capacity, institutional support and behavioural factors in influencing both farmers’ decisions to adopt agricultural insurance and the level of coverage they choose. Practical implications Targeted policy interventions, such as rural radio campaigns, tax incentives and strengthened extension services, could potentially double the adoption rate (currently around 30%) while enhancing farmers’ resilience to climate-related risks in Senegal. Originality/value This study contributes to the agricultural insurance literature by proposing a multidimensional modelling framework that simultaneously examines insurance adoption and the intensity of participation. By integrating behavioural, socioeconomic and institutional determinants within a unified analytical framework, it complements the extant literature by examining drivers of farmers’ decisions to adopt agricultural insurance.