Policies and Mechanisms for Providing Insurance and Risk Management Tools to Livestock Farmers to Protect Them against Production Risks

Abstract

Purpose: The aim of the study was to explore policies and mechanisms for providing insurance and risk management tools to livestock farmers to protect them against production risks. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study reveals that policies and mechanisms for providing insurance and risk management tools to livestock farmers play a crucial role in protecting them against production risks and enhancing their resilience. The study also demonstrated the effectiveness of various insurance schemes, such as index-based insurance and community-based insurance, in reducing livestock mortality rates, increasing investment in productive assets, and improving household welfare outcomes. However, challenges such as basis risk, limited outreach, and institutional barriers continue to impede the widespread adoption and effectiveness of insurance interventions. Unique Contribution to Theory, Practice and Policy: Risk management theory & institutional theory may be used to anchor future studies on policies and mechanisms for providing insurance and risk management tools to livestock farmers to protect them against production risks. Develop tailored training programs that provide farmers with the knowledge and skills needed to assess risk, understand insurance products, and make informed decisions about risk management strategies. Policy interventions should focus on improving the design and affordability of insurance schemes, enhancing access to financial services in rural areas, and promoting regulatory frameworks that support the growth of insurance markets.