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The impact of climate change and variability on livelihoods of smallholder farmers in Northern Ghana has become severer than ever before. As a result, crop insurance has been advocated as one of the recommended risk transfer mechanisms to support farmers in coping with production risks. We used a multistage sampling procedure to select a sample of 315 farmers from 15 farming communities in the Northern Region of Ghana and obtained from this sample the data needed for the analysis. We then applied the contingent valuation method to the data and evaluated the premium amount maize farmers in the study area are willing to pay for crop insurance under a hypothetical market-based drought-index insurance regime. In addition, we used the binary probit model to identify the drivers of farmers’ willingness to pay (WTP).

agriculture and food security

Looking out for a better mitigation strategy: smallholder farmers’ willingness to pay for drought-index crop insurance premium in the Northern Region of Ghana