Agricultural Risk Financing in a Disaster-Prone Society: A Special Focus on World Bank’s Agricultural Grant in Enugu State, Nigeria

Abstract

This paper explored the significance of risk financing in agricultural business farms such as Enugu state where disasters are prevalent. It examined the impact of risk transfer and risk retention on agricultural activities in the research area. The study employed a survey research design. The study population was farmers in Enugu state, while a convenient sampling technique was used to select 255 farmers across 17 local governments of the state that participated in the study. An appropriate sampling technique was used to collect data from the selected respondents (farmers). Linear regression analysis was employed to validate the research hypothesis at a 0.05 significant level. The findings showed that risk financing significantly impact agricultural activities in Enugu state. Therefore, major recommendations were that Farmers should join the Nigeria Agricultural Insurance Scheme (NAIS) for all Agricultural Risks Insurance Coverage, Buy Agricultural Insurance Coverages from other reputable agricultural Insurers to stabilise income during the periods of loss, adapt risk reduction practices such as drip irrigation, tile drainage, trap crops or resistant varieties, etc. The study contributes to knowledge by identifying various ways farmers can finance the risks associated with farm produce, such as retaining such risks internally by making other financial provisions for them or buying agricultural insurance from insurance companies or enroll in the NAIC Scheme.