Risk Management Using Agricultural Insurance In The Gezira Scheme, Sudan

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Date
2015-06-15
Authors
Elnour,Sara Ahmed Elnour
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Publisher
University of Khartoum
Abstract
The main objective of the study was to investigate the impact of the major risks on agricultural production in the Gezira Scheme, and the economic measures used to minimize those risks. The study used primary data which have been collected through a field survey, using structured questionnaires and direct interviewing with tenants of the Scheme for the growing season (2008/09). A multi-stage stratified random sample of 150 respondents was selected from the tenants of Centre and Wadi Shaeer groups. Secondary data obtained from official records were also used. The analytical techniques used to achieve the objective of the study were descriptive statistics, gross margin analysis, schematic analysis and correlation analysis. For risk analysis, a quadratic risk programming model was developed, using non-linear programming. The descriptive results revealed that the majority of the farmers (80%) were within the productive age group, they were relatively educated and had long experience in farming activities. The results also showed the low participation of the family labour in agricultural work (18% of the total labour used). The tenants did not diversify their income sources, as 67%of them had no off farm income, there for their total income was low. The results showed that crop insurance had a positive impact in reducing the effect of agricultural risks that faced the tenant in the Scheme. As a result, tenant incomes stabilized. Insurance facilitated access to credit by serving as guarantee against involuntary defaults. The risk analysis revealed that production, market and financial risks were predominant in the Gezira Scheme, and had effect on agricultural production and farm income. Management of the agricultural risks positively improved the farm income. However, use of more modern risk management systems is needed for more sufficient dealing with agricultural risks. The results of the quadratic risk programming model showed that groundnut is the most risky crop in the Scheme, followed by sorghum, cotton and wheat. Also, it revealed that achieving higher income entails higher risk. The study recommended improvement of the extension programs and on-farm risk management systems to enhance productivity and stabilize farmers' incomes. The study also recommended increasing insurance awareness of farmers and reducing the insurance cost in order to increase the number of participating farmers. Moreover diversification of income sources is recommended
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156 Pages
Keywords
Agricultural Insurance; Gezira Scheme;Sudan;sorghum;cotton; wheat;
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