Understanding The Variation Of Weather Index Insurance Amongst Farmers In Zambia: To Recommend A Framework That Should Enhance The Uptake Of Wii In The Agriculture Sector For Smallholder Farmers

Abstract

Understanding the importance of the Weather Insurance Index (WII) as a financial tool for risk mitigation is increasingly critical to the development of sustainable agriculture. This is because the effects of climate change continue to endanger and ruin the agriculture sector, which is dominated by smallholder farmers. Among the many climate change coping mechanisms used by farmers, microinsurance remains one of the key techniques available. However, its uptake is significantly low, coupled with a lack of empirical evidence to clearly understand the underlying reasons for the status quo. The main objective of this study was to develop and recommend a framework that could enhance the uptake of WII by farmers. Results from this study were generated using a mixed-methods approach and captured from 1,024 farmers who were purposively sampled from 4 districts in Zambia. The findings showed significant and positive results of payout systems as an important enabler in the uptake of WII. Further, the cooperative systems had a significant influence as an appropriate distribution model through which the farmers got information, premiums, payouts, and aggregation. This recommended framework will be key in facilitating the uptake and scale-up of WII and other financial instruments amongst farmers.