Agricultural Insurances Based on Meteorological Indices: Realizations, Methods and Research Agenda
AbstractIn many low-income countries, agriculture is mostly rain-fed and yields highly depend on climatic factors. Furthermore, farmers have little access to traditional crop insurance, which suffers from high information asymmetry and transaction costs. Insurances based on meteorological indices could fill this gap since they do not face such drawbacks. However their implementation has been slow so far. In this article, we first describe the most advanced projects that have taken place in developing countries using these types of crop insurances. We then describe the methodology that has been used to design such projects, in order to choose the meteorological index, the indemnity schedule and the insurance premium. We finally draw an agenda for research in economics on this topic. In particular, more research is needed on implementation issues, on the assessment of benefits, on the way to deal with climate change, on the spatial variability of weather and on the interactions with other hedging methods.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2010.71.
Date of creation: Jun 2010
Date of revision:
Agriculture; Insurance; Climatic Risk;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-07-24 (Agricultural Economics)
- NEP-ALL-2010-07-24 (All new papers)
- NEP-ENE-2010-07-24 (Energy Economics)
- NEP-ENV-2010-07-24 (Environmental Economics)
- NEP-IAS-2010-07-24 (Insurance Economics)
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- Antoine Leblois & Philippe Quirion, 2011.
"Weather-index drought insurance : an ex ante evaluation for millet growers in Niger,"
CIRED Working Papers
- Leblois, Antoine & Quirion, Philippe & Alhassane, Agali & Traore, Seydou, 2011. "Weather index drought insurance: an ex ante evaluation for millet growers in Niger," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 120378, European Association of Agricultural Economists.
- Antoine Leblois & Philippe Quirion, 2011. "Weather-index drought insurance : an ex ante evaluation for millet growers in Niger," Working Papers hal-00866438, HAL.
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