Effect of Agricultural Insurance Adoption on the Productivity of Smallholder Rice Farmers in North Central Nigeria

The actual impact of agricultural insurance adoption on the productivity of smallholder rice farmers remains inadequately understood. Thus, this study investigated the effect of agricultural insurance adoption on the productivity of smallholder rice farmers in North Central Nigeria. Data for the study were collected from 400 smallholder rice farmers consisting of 200 adopters and 200 non-adopters of agricultural insurance selected from 20 communities of four States in North Central Nigeria using multistage sampling technique. The collected data were analysed using independent sample t-test and endogenous switching regression model (ESRM). The findings showed that the mean productivity of adopters of agricultural insurance in the study area was approximately 20bags/ha while that of the non-adopters was 18bags/ha. The t-test result shows that there was significant difference at 1% in the farm output of adopters and non-adopters of agricultural insurance (t = 2.713, p < 0.01). The ESRM showed that rice farmers who adopted agricultural insurance were better than random rice farmers in terms of farm productivity. The ESRM also revealed that agricultural insurance adoption and productivity of smallholder rice farmers were significantly influenced by their socio-economic characteristics. The study recommended that campaigns on farmers’ awareness of agricultural insurance should be intensified by the government and other stakeholders to encourage patronage; and that policies and programmes targeted at making more smallholder farmers subscribe to agricultural insurance as well as to increase their productivity should take into consideration the socioeconomic characteristics of the farmers in their design and implementation.