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Factors Affecting Adoption of Livestock Insurance as a Risk Management Tool in Nawalparasi District, Nepal
Ghanshyam Kandel, Ram Hari Timilsina

Last modified: 2017-08-30


Livestock sector faces lots of risks resulting from the disease, parasites, accident, and infertility. Insuring livestock is the most appropriate strategy to manage the different risk related to livestock farming but insurance coverage is still low in Nepal with respect to total national herd. The main objective of this study is to assess the factors affecting adoption of livestock insurance as a risk management tool. Nawalparasi district was selected purposively for the purpose of the study. Cluster sampling was done to select sample cluster and respondent farmers were selected randomly from Rajahar cluster. Information was collected from 40 livestock insured farmers and 40 livestock non-insured farmers by using pre-tested interview schedule. The data were analyzed using descriptive statistics and a binary logistic regression model. It was found that majority of insured farmers (82.5 percent) and only 32.5 percent of non-insured farmers were aware of premium subsidy schemes of insurance provided by the government. Insured farmers perceived that current risk coverage, premium subsidy, insurance procedure were good but they were dissatisfied with claim settlement procedure and time took to settle the claims. Key factors affecting the livestock insurance adoption were found as variables such as total adult dairy animal (p=0.04), holding membership by the farmers (p=0.037), extension contact of farmers (p=0.024) and knowledge about the premium subsidy schemes (p=0.005). It is recommended to increase the insurance awareness and to provide insurance service at the local level in order to increase insurance coverage in the livestock sector.

Key words: Claim settlement, livestock insurance, risk coverage, premium subsidy

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