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Double Hurdle Analyses of Factors Influencing the Participation of Poultry Farmers in Insurance in Afijio Local Government, Oyo State

V. O. Okoruwa
S. A. Oladokun
C. A. Amaghionyeodiwe
D. C. Anizoba


The poultry industry in Nigeria is a high-risk enterprise that is particularly subject to the vagaries of nature and hence the need for farmers to hedge their business. Therefore, this study investigated insurance coverage among poultry farmers as a risk mitigation tool. The study was conducted in Afijio Local Government Area of Oyo State, Nigeria. A multistage sampling technique was employed to select representative farmers for the study. One hundred and twenty (120) farmers were randomly selected from all sampled communities. The data were analyzed using descriptive statistics and a double hurdle regression model. The results show that 25.42% of the poultry farmers had insurance, while 74.58% had no insurance policy. The double hurdle regression model showed a good fit of a chi-square value of 27.58, which was significant at 1%. The result showed that members of cooperatives, the number of birds, access to extension agents, and farming experience were important factors influencing the decision to take insurance. The analysis of the constraints faced by poultry farmers in the uptake of insurance showed that high premium rate fears that claims might not be paid, and insufficient compensation in the event of loss were the significant challenges experienced by poultry farmers in their use of insurance. Therefore, the study recommends effectively targeting farmers for sensitization on the benefits of joining cooperatives and other social groups and, most importantly, better accessibility of poultry farmers to extension services to improve their insurance uptake.