The effect of weather index based micro-insurance on food security status of smallholders

Abstract

Research has demonstrated that the use of weather index insurance is one of the most effective ways of cushioning smallholders against the vagaries of nature like excess rains and drought hence improving smallholders’ food insecurity status. We use cross sectional data from 401 farm households inEmbuCounty, easternKenyaand a propensity score matching technique. We model the effects of adoption of weather index based insurance decision on food security of the smallholder farmers. We find that a positive impact on food security is associated with the uptake of index insurance. This suggests that index insurance technology can benefit farmers more through up-scaled use of index based insurance in the context of their socio-economic conditions and institutional arrangements.