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Non-cognitive Skills and Willingness to Participate in Drought Index Crop Insurance in Ghana

A Policy Brief
An Abstract

Summary

Several studies have examined the role of safety-net programme in mitigating agricultural production risks. However, there is a lack of evidence on how non-cognitive skills (NCS) influence farmers’ participation in safety net programmes. This study investigates the relationship between farmers’ noncognitive skills and willingness to participate in drought index crop insurance (DICI) using a farm household survey of 1,100 farmers in the Northern and Upper East regions of Ghana. The results show that locus of control (LOC) and self-efficacy significantly predict farmers’ willingness to participate in DICI. We find that individuals who believe they have control over outcomes in their lives with a perceived judgement of capability to alter or influence outcomes are more likely to participate in DICI. Social capital is the main channel via which NCS influences willingness to participate in DICI. Noncognitive skills are mainly effective in improving willingness to participate in DICI in male-headed, youth-headed, low, and middle-income households, and households with large social capital. Our findings highlight the important roles of behavioural and psychological factors that underline participation in agricultural insurance programmes. The study implies that adopting agricultural insurance programmes can be enhanced by improving farmers’ non-cognitive skills.

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Author(s)

E. Martey, J. K. M. Kuwornu, F. H. Kemeze, P. M. Etwire, E. K. Apiors, M. J. Miranda

Principal Investigator:

John K. M. Kuwornu

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