Technology adoption and food security: the role of the Nigerian Agricultural Insurance Scheme

Abstract

The focus of this paper is on the potential role of the Nigerian Agricultural Insurance Scheme (NAIS) in protecting the farmer from the plethora of risks associated with the transfer and introduction of modern technologies. The scheme can improve farmers' access to credit when the insurance contract is used as collateral for loans. Farmers can therefore obtain the necessary capital to purchase new technologies. It can also provide the farmer some form of guarantee against the risk of failure resulting from the adoption and use of new technologies. Therefore, to the extent that technology adoption is constrained by risk and uncertainty and lack of access to credit, the insurance scheme can reduce or eliminate these constraints and induce farmers to use improved technologies.