Concept Note

Small-scale farmers Response to insurance companies' intervention in climate change

mitigation in Laikipia County, Kenya
1.0 Introduction
Agriculture is the backbone of most African economies as it employs approximately 65 Commented [U1]: Repackage your introduction into
few powerful paragraphs.
percent of Africa's labor force. It also contributes to about 60 percent of Africa's total
export earnings up to 40 percent of the total gross domestic product (GDP), (International
Food Policy Research Institute (IFPRI), 2009). However, key challenges have emerged in
the agricultural sector climate change being the most important. Drought in Africa affect
about 220 million people every year and it is projected that by 2020, yields from rain-fed
crops could fall by 50 percent in some countries; while net revenues loss from crops could
fall by 90 percent (Huho and Kosonei, 2013). The rampant food crisis that has been
recently experienced in most sub-Saharan Africa countries are reminders of the
continuing vulnerability of the region to the impacts of climate change. This has been
largely attributed to weak institutional capacity, limited engagement in environmental
and adaptation issues, and a lack of validation of local knowledge (Adepoju and Obayelu,
2013). Climate change has the potential to affect development activities in Africa and can
hinder the achievement of the Sustainable Development Goal (SDG) no. 13, which focuses
on enhancing the resilience of climate change. According to the IPCC 5th assessment
report, the poorest people majority of whom are marginalized and live in developing
countries feel the most serious impacts (IPCC, 2014)
Climate change threatens sustainable economic development and the totality of human
existence in Africa. It is one of the most important environmental issues facing Africa
today as the impact is a real and has affected all climate-sensitive sectors including
Agriculture (Maponya et al., 2013). Stakeholders in the Agricultural sector including
farmers have come to a consensus that climate change is a reality and the impacts cannot
be ignored anymore. The impact of climate change varies globally with small-scale
farmers being the most vulnerable because of their dependence on rain-fed agriculture,
low adaptive capacity, limited financial capacity, and high dependence on natural
resources, low technology adoption, limited infrastructure and lack of capacity to
diversify (Kurukulasuriya and Mendelsohn, 2006). grassland degradation and
deforestation among others. These impacts are particularly exacerbated extreme events
such as frequent droughts, unpredictable floods and change in rainfall patterns (Collier
et al., 2008).
Managing the risks from climate change requires urgent action both to mitigate
atmospheric greenhouse gas levels through reducing global emissions and to adapt to
the changes in climate at a local level to minimize risks and maximize potential
opportunities. The insurance industry can have an important role to play in both of these
responses. Adaptation, or lack thereof, is particularly critical to the insurance industry as
it directly affects the very core of their property and casualty businesses; the risk
landscape that they insure and the concept of ‘‘insurability'' itself. Insurance can be an
effective risk management tool to cover losses arising from yield variability (Roberts,
2005). It involves insurance of crops, livestock, forestry, aquaculture, and green housing.
Farmers can guard against the negative effects of climate variability and stabilize their
farm income by adopting agricultural insurance. Crop insurance helps to stabilize farm
income and also helps the farmer to recover after experiencing losses due to a bad
agricultural year. The major problem associated with insurance is the farmers'
willingness to pay the premium. According to Hiwot and Ayalneh, (2014) willingness to
pay (WTP) is the amount that must be taken away from the person's income while
keeping his utility constant in the same manner, it is influenced by individual tastes and
preferences, income attitudes and perceptions of the type of product as well as
household, demographic characteristics (Canfield et al., 2003). The perception of the
farmers regarding the choice of insurance as a method of mitigating climate change and
the factors that influence their willingness to pay for insurance are not clear. This study
aims to fill the gap by evaluating the socio-economic and institutional factors that
influence farmers' choice of insurance to mitigate climate change and determining the
factors influencing willingness to pay agricultural insurance to mitigate climate change.
1.1 Problem statement

1..12 Objectives
The general objective is to contribute to sustainable livelihoods by enhancing smallholder
farmer response mechanisms to climatic change through insurance.
1.32 Specific objectives
1. To characterize small scale farmers in Laikipia County Commented [U2]: Specify, make it comprehensive

2. To evaluate the socio-economic and institutional factors that influence farmers'

choice of insurance to mitigate climate change.
3. To determine the factors influencing the willingness to pay agricultural insurance
to mitigate climate change.
1.43 Justification Commented [U3]: Put your justification in paragraph
constituting of single topic
Climate variability constitutes a major risk for all dimensions of sustainable
development. Actions to mitigate and adapt to climate variability are likely to have
significant implications for most dimensions of sustainable development. Lack of
adaptation and mitigation may make targets related to many Sustainable Development
Goals (SDGs) more difficult to achieve, and more difficult to sustain over time beyond
2030. Hence, this study contributes to the realization of the Sustainable Development
Goal 13 (SDG 13) which emphasizes the urgency of curbing the effects of climate change.
The findings of the study will also help policy makers to plan and incorporate viable
solutions to mitigate climate change, therefore, contributing to the achievement of the big
four agenda. Finally, the study will provide insight into insurance companies on the best
models to address the challenges faced by small scale farmers as a result of climate
change.
2.0 Methodology
The study will be carried out in Laikipia County, which is one of the areas affected by
climate change and experiences constant fluctuations in weather conditions. The study
will use descriptive statistics and a simple regression model to analyze the factors
influencing farmers' choice of insurance to mitigate climate change. A contingency
valuation model will be used to analyze the factors influencing willingness to pay for
insurance as a way of mitigating climate change.
Commented [U4]: We suggest to divide this chapter
into sub topics, including: description of research
site/study area; data collection (explain methods and
strategies); data analysis (including statistical methods
and tools)
Commented [U5R4]: Perhaps you could include some
parameters
 3.0 Work plan
S/N Activity 2019

Feb March April May June July Aug Sept Oct Nov Dec

1 Concept Note
and Proposal
Development
2 Presentation of
proposal to the
Department
3 Presentation of
proposal to the
Faculty
4 Correction and
Submission of
proposal to
Graduate
School
5 Data Collection
and Entry
6 Data Analysis,
Thesis Writing
and Submission
10 Thesis Defence

Commented [U6]: Add references / bibliography