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Pitfalls and potential of institutional change: Rain-index insurance and the sustainability of rangeland management

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  • Müller, Birgit
  • Quaas, Martin F.
  • Frank, Karin
  • Baumgärtner, Stefan

Abstract

Rain-index insurance is strongly advocated in many parts of the developing world to help farmers to cope with climatic risk that prevails in (semi-)arid rangelands due to low and highly uncertain rainfall. We present a modeling analysis of how the availability of rain-index insurance affects the sustainability of rangeland management. We show that a rain-index insurance with frequent payoffs, i.e. a high strike level, leads to the choice of less sustainable grazing management than without insurance available. However, rain-index insurance with a low to medium strike level enhances the farmer's well-being while not impairing the sustainability of rangeland management.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 70 (2011)
Issue (Month): 11 (September)
Pages: 2137-2144

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Handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2137-2144

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Web page: http://www.elsevier.com/locate/ecolecon

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Keywords: Ecological-economic modeling Weather-index insurance Namibia Risk Grazing management Africa;

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Cited by:
  1. Antoine Leblois & Philippe Quirion & Benjamin Sultan, 2014. "Price vs. weather shock hedging for cash crops: ex ante evaluation for cotton producers in Cameroon," Post-Print halshs-00967313, HAL.
  2. repec:hal:wpaper:hal-00796528 is not listed on IDEAS
  3. Sherren, Kate & Fischer, Joern & Fazey, Ioan, 2012. "Managing the grazing landscape: Insights for agricultural adaptation from a mid-drought photo-elicitation study in the Australian sheep-wheat belt," Agricultural Systems, Elsevier, vol. 106(1), pages 72-83.

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