Factors affecting Uptake of Index – Based Crop Insurance among the Smallholder Farmers: A Case Study of Tanzania

Abstract

The development of agriculture in Tanzania is facing several challenges. Risks are among the factors that are derailing the growth of this important sector. In a bid to reduce risks related to weather, Index Based Crop Insurance (IBCI) was introduced to smallholder farmers. This study aims to examine the determinants of uptake of IBCI. Data was collected through a household survey. Estimation of a Logistic Regression Model reveals that the age of the household head, farming experience, income and distance to paved roads have a significant influence on the uptake of IBCI in the area. These findings highlight the need to create more awareness among less experienced, young and those located a bit far from town centers (paved roads) with inadequate access to information about the usefulness and functionality of the IBCI as well as addressing issues of purchasing power. 

Keywords: Adoption, Crop Insurance, Logistic Model