How Prepared are Cameroon's Cocoa Farmers for Climate Insurance? Evidence from the South West Region of Cameroon

Abstract

It is a truism that Cameroon's agricultural sector in general and the cocoa sector in particular has been hit by climatic vagaries with telling repercussions. Cocoa (Theobroma cacao Linn.) production remains one of the main cash crops in Cameroon with over 90% of households in the cocoa producing areas depending on it for their income. Cameroon ranks fifth in the world in cocoa production which has a significant contribution to her economy. This important sector is exposed to climate-related shocks requiring mitigation and adaptation strategies. From an economic perspective, climate-insurance has been suggested as one of the solutions to this problem, as an option to reduce farmers’ vulnerability. However, there is little or no information on farmers’ preparedness and willingness to pay for climate –related insurance. This article therefore seeks to ascertain the level of preparedness of farmers to sue for climate insurance in cocoa producing areas in Cameroon. We randomly selected 10 cocoa farmer cooperatives drawn across the main cocoa producing divisions of the South West Region - a major cocoa producing region in Cameroon. We combine a structured questionnaire survey with focus group discussions to assess cocoa farmers’ awareness, knowledge, perception, level of preparedness and challenges to adopting climate insurance. Furthermore, we interview insurance authorities within the region on existing insurance policies. This information is complemented through field observations and review of relevant literature. We employ descriptive and correlation analysis to assess cocoa farmers’ perceptions and level of preparedness for climate insurance. We observe that there is a direct statistically significant relationship between farm sizes, level of diversification and awareness, and farmers’ preparedness (P≤0.05). Income levels showed a significant but indirect relationship with level of preparedness. Poverty, uncertainty, and weak institutions operating with policies that do not consider farmers’ realities were key challenges to climate-insurance preparedness. Based on the results we recommend that (i)insurance bodies should undertake feasibility study on the possibilities of instituting friendlier policy for farmers, (ii) farmers should sensitized on the relevance of insurance policies to support cocoa farming in the face of climate vagaries, (iii) farmer groups should strengthen cooperative spirit to ease access to pro-poor insurance policies; and (iv) government should work in partnership with insurance bodies to support farmers through more climate-friendly insurance policies which can be accessed by farmers irrespective of their levels of diversification, income and farm sizes.