WILLINGNESS TO ADOPT INDEX BASED CATTLE INSURANCE IN THE FACE OF CLIMATE CHANGE: EVIDENCE FROM SMALLHOLDER CATTLE FARMERS IN THE POLOKWANE LOCAL MUNICIPALITY, SOUTH AFRICA

Abstract

This paper analysed the determinants of smallholder cattle farmers’ willingness to adopt Index-Based Cattle Insurance (IBCI) being climate change adaptive strategy in the Polokwane Municipality of South Africa. A multi-stage purposive sampling procedure was employed to collect primary data using structured questionnaires from 110 smallholder cattle farmers. The results revealed that about 89% of the sampled farmers were willing to adopt IBCI, while about 11% weren’t willing to adopt IBCI. The Probit regression model results revealed that marital status, farming experience, access to extension services, off-farm income and land ownership had a positive and significant influence on the willingness to adopt IBCI. However, educational level, household size, experience of cattle loss and farm size significantly influenced willingness to adopt IBCI negatively. Therefore, this study recommends workshops for raising IBCI awareness, government subsidy on insurance premiums and finally, improved market access and extension services for smallholder cattle farmers for sustainable livelihoods.

Keywords

• climate change, willingness to adopt, smallholder cattle farmers, index-based insurance, contingent valuation method, probit regression model.