Index-Based Insurance for Cocoa Production in Ghana: Just a Mirage?
Lydia Afriyie1, Astrid Zabel1, Lawrence Damnyag2
1Bern University of Applied Sciences, School of Agriculture, Forest and Food Sciences, Switzerland
Index-based rainfall insurance is a financial adaptation option that pays out benefits based on a predetermined index e.g. rainfall level. It is a measure that has the potential to improve cocoa farmers' resilience and enhance their adaptability to climate change induced risks. However, the complex nature of the cocoa sector and the organisational structure of Ghanaian farmers create uncertainty about the adoption and successful implementation of index insurance. This paper presents results of a study on factors impacting farmers' willingness to pay for index insurance as well as organisational and institutional factors that can influence its demand and adoption in Ghana. Primary data were collected through structured surveys with 313 households in 20 communities in Bia East and Dormaa West districts. In addition, five insurance companies were interviewed to determine their interest in and potential challenges for the establishment of a market for index insurance products for farmers. Key informant interviews were conducted with representatives of the Ghana Cocoa Board to determine the factors that can affect adoption of index insurance.
Keywords: Cocoa farmers, Ghana, index-insurance, willingness-to-pay
Contact Address: Lydia Afriyie, Bern University of Applied Sciences, School of Agriculture, Forest and Food Sciences, 3052 Zollikofen, Laenggasse 93 Bern, Switzerland, e-mail: afriyielydiaymail.com