Abstract
Livestock husbandry insurance (LHI) is increasingly gaining acceptance in developing countries, relative to its efficacy in mitigating the covariate risks faced by households in vulnerable agrarian communities. However, this risk-mitigating tool has received little research attention in the context of Chinese herders. The current study focused on the status, and determinants of herders’ willingness to purchase LHI. We used a contingent valuation approach to collect data from 450 households across three grassland types in Inner Mongolia. Descriptive statistics and binary logistic regression models were used to analyze the collected data. We show that herders’ level of awareness and acceptance of LHI are below expectations. Our results further indicated that herders with higher education level, livestock number, risk perception level, awareness, and contracted grassland area are more likely to purchase LHI. Policymakers and insurers should design programs that will educate herders on LHI while taking cognizance of other critical factors that influence households to purchase insurance. This will go a long way in scaling-up the attractiveness of LHI to herders and the agrarian community at large.
Highlights
The agricultural economy of China is one of the largest across the globe [1]
Our result corroborates the earlier reports [9,15,32] that household education had a positive impact on farmers’ decision to adopt crop and livestock insurance. This can be attributed to three possible reasons: (1) education assists farmers/herders to understand the importance of insurance as a useful tool in mitigating risk in their livestock production [4,39]; (2) education improves the knowledge of herders about the consequences of climate change and to see reasons to purchase livestock husbandry insurance (LHI) to minimize its possible impact [5,40]; and (3) education enhances the adoption of livestock insurance by broadening the thinking of herders to enhance sound decision making related to risk management [9,33]
Our results suggest the need for insurers, policymakers, and research institutes within the study area to design programs that will focus on educating herders on the potential benefits of insurance to improve herders’ knowledge of insurance and subsequent uptake of it
Summary
The agricultural economy of China is one of the largest across the globe [1]. It is characterized by the highest livestock herds worldwide, which are predominantly raised on grassland by the pastoral households. When natural pastures decline owing to climatic change or variability and in the absence of modern-risk coping measures [4], the foremost traditional approach of managing such risk by herding households include storage of forage and water for future use [5], creation of dry and wet season grazing areas, and splitting of the herd for easy management [6,7,8] These traditional methods of risk management are less efficient due to the co-variability of weather-related challenges faced by herding households [9,10]. Livestock husbandry insurance (LHI) can be a viable market-based tool capable of guaranteeing the protection of livestock assets [4,11,12], stabilizing herders’ income [13,14,15], and curbing the effects of uncertainty on the welfare of relatively poor households [16,17]
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