From Perception to Decision: Analysing Constraints and Determinants of Voluntary Agricultural Insurance Uptake among Nigerian Rice Farmers

This study examines the determinants and perceived constraints of voluntary agricultural insurance uptake among rice farmers in Kwara State, Nigeria, by integrating binary logistic regression and Garrett’s ranking technique. A stratified random sampling technique was employed to select 340 rice farmers from a sampling frame of 2,267 registered members of the Rice Farmers Association of Nigeria (RIFAN), comprising both Anchor Borrowers’ Programme (ABP) beneficiaries and non-beneficiaries. Binary logistic regression was used to identify the socio-economic and institutional factors influencing voluntary agricultural insurance uptake, while Garrett’s ranking technique was employed to assess the severity of farmers’ perceived constraints. The logistic regression results show that years of education negatively and significantly influenced voluntary insurance uptake, whereas membership in farmer associations had a positive and significant effect on participation. Other explanatory variables were not statistically significant. The likelihood ratio test showed that the model was statistically significant (χ² = 33.68, p < 0.01), indicating that the explanatory variables jointly influence participation decisions. Garrett’s ranking technique identified inflexible premium payment structures, lack of trust in insurance providers, low farm income, limited insurance coverage, and high premium costs as the most severe constraints to participation. These findings indicate that perceived constraints and statistically significant determinants provide complementary insights into farmers’ insurance adoption behaviour. The study recommends introducing flexible premium payment options, improving transparency in insurance administration and claims settlement, expanding insurance coverage, and strengthening farmer-based organizations to enhance voluntary agricultural insurance uptake among rice farmers in Nigeria.