Effects of Crop Insurance and Finance on Small-Scale Maize Productivity in Zambia

Productivity of maize is dependent on facilitative and competitive interactive effects on resource availability and other moderating factors. The study investigated the impact crop insurance and financing had on the productivity of small-scale maize farmers in Southern province of Zambia. It also sought to see the effect moderating factors have on maize productivity. The relationship between crop insurance and financing, and maize productivity was explored by interviewing 602 farmers in Mazabuka, Monze, Choma and Kalomo districts through a structured questionnaire. This also included interviews with insurance and finance providers. SPSS and hierarchical multiple regression analysis were used to evaluate the data after making some assumptions. The regression analysis was run to determine the relationship between maize productivity, loan, insurance and the interaction between loan and insurance over and above the control variables. The results showed that the relationship was not supported (t = -0.750, p > 0.05) and that insurance and financing in the four districts studied did not have any effect on productivity. There was no significant relationship between crop insurance and productivity (t = -1.741, p > 0.05). The model used to analyze the data excluded financing as it did not bring any additional significant information. The results further indicated that there was linearity as determined by partial regression plots, as well as residual independence as determined by the Durbin-Watson statistic of 1.745. Results showed no evidence of multicollinearity based on correlations and Variance Inflation Factors (VIFs) and that farmers relied heavily on the government subsidy program, the FISP which resulting in less or no effect of commercial crop insurance and financing on productivity.