Agricultural Insurance Penetration and Farmer Risk Management in Benue State

This study examines agricultural insurance penetration levels and their effectiveness as a risk management tool for smallholder farmers in Benue State, North Central Nigeria. Benue State, known as Nigeria's food basket, hosts a predominantly agrarian population exposed to significant weather, disease, and market price risks. The Nigeria Agricultural Insurance Corporation and private insurers offer a range of crop and livestock insurance products, yet uptake among smallholder farmers remains limited despite government premium subsidy programs. This study adopts a survey design, collecting data from 200 smallholder farmers and 15 agricultural insurance providers in Makurdi, Gboko, and Katsina-Ala local government areas. Insurance awareness, uptake rates, claims experience, and perceived product effectiveness are assessed. Chi-square analysis and logistic regression are applied to identify determinants of insurance adoption. Findings reveal that only 18 percent of sampled farmers held any form of agricultural insurance during the study period. Awareness of available products is low, and trust in claims settlement processes is limited based on negative peer experiences. Among insured farmers, indemnity-based crop insurance showed higher satisfaction than index-based products due to more direct loss verification. The study concludes that agricultural insurance penetration in Benue State is inadequate given the level of farming risk exposure. It recommends that NAIC increase extension officer presence in rural communities and simplify claims documentation requirements to improve both uptake and policyholder satisfaction.

Keywords: agricultural insurance, smallholder farmers, Benue State, risk management, NAIC.