Risk management strategies of cattle farmers in Namibia - Case study from Omaheke and Otjozondjupa region.

Abstract

A sample survey of 269 questionnaires was administered to commercial and communal cattle farmers in the two regions of Namibia, (Omaheke and Otjozondjupa) to identify factors which affect the adoption of livestock insurance. About 205 questionnaires were collected and the 64 questionnaires were regarded as irregular responses or not returned. A computer software programme was used to generate a logit model. This model was used to test the alternative risk management strategies used by farmers in the two regions. In addition, this research took into account the off-farm investment and farm enterprise diversification. The logit model produced results that are statistically significant and negative estimated coefficient of the household characteristics. This implies that the Namibian livestock industry growth can be achieved with improved education, experience and support from other income as way of diversifying risk strategy. However, the positive relationship of variables FTHEFT and PROD implies the sector is suffering from continuous risk of theft and requires quality production to get market access. This necessitates the need for policy makers and insurers to design programme to educate farmers so that they can adopt proper risk management tools and thereby increase their participation in insurance. The low level of education of many farmers in the study area may have negatively influenced the decision to purchase livestock insurance in addition to other factors.