Assessment on farm enterprises, major agricultural risks and demand for micro-insurance services by smallholder farmers in selected areas of Benishangulgumuz, Western Ethiopia

The study was conducted in Assosa district of Benishangul-Gumuz regional state, western Ethiopia, to assess major farm enterprises, agricultural risks and demand for micro-insurance services. Two peasant associations namely, Selga-23 and Kushmengel were selected to represent settler and native farming communities, respectively. Using simple randomized techniques, 86 respondents were selected for the study. Data were collected from both primary and secondary sources. Data were analysed using SPSS software. Descriptive, T-test, chi-square test and correlation analysis were used for data analysis. Rank index analysis was also done to order multiple variables using Microsoft excel. Results revealed that teff is the most important crop followed by finger millet for settler community whereas, maize the most widely grown crop in native community followed by teff. Cattle, goat and chicken are widely reared livestock species in the study areas. However, both crop and livestock production face natural adversities and climatic factors that is out of control of smallholder farmers. Smallholder farmers tried coping with the risks primarily by selling some of their livestock resources and reducing home consumption. Thus, provision of micro-insurance for smallholder farmers in a coordinated way can be a better way out of this crisis. There is high demand for micro-insurance services in the study area and smallholder farmers showed strong willingness to pay to premiums. Thus, it was recommended that multi-peril crop insurance and indemnity based livestock insurance can be used in study areas based on the nature of agricultural risks.