Impact of weather index crop insurance on smallholder farmers’ multidimensional food security: evidence from Ethiopia

Abstract

Weather events have threatened the realization of food security in Ethiopia. Weather-index crop insurance (WICI) is a risk-transferring strategy recently introduced to farmers in Ethiopia. The study aims to assess the impact of WICI on smallholder farmers' multidimensional food security. To realize its objective, relevant indicators, and the Foster-Greer-Thorbecke index were applied to capture the multidimensional realities of food security and the propensity score matching technique to examine the impact. The results show that WICI has a significant positive impact on smallholder farmers' availability, access, utilization and food stability. Besides, the insured farmers have lower incidence, depth, and severity of food insecurity by 9.44%, 3.24% and 1.06% than non-insured farmers. Thus, to realize progress in food security, we advocate improving smallholder farmers' access to affordable WICI products: the existing pilot crop insurance projects shall be used as a milestone to establish an all-inclusive crop insurance program in Ethiopia. The study urges due attention and integrated efforts to build a reliable weather database system and solve smallholder farmers' meager willingness to pay. It contributes to the debate on how WICI impacts farmers' multidimensional food security, arouses further studies on the issue and policy action on building shock-resilient food security.