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Weather Indices for Designing Micro-Insurance Products for Small-Holder Farmers in the Tropics

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  • Jacqueline Díaz Nieto
  • Myles Fisher
  • Simon Cook
  • Peter Läderach
  • Mark Lundy

Abstract

Agriculture is inherently risky. Drought is a particularly troublesome hazard that has a documented adverse impact on agricultural development. A long history of decision-support tools have been developed to try and help farmers or policy makers manage risk. We offer site-specific drought insurance methodology as a significant addition to this process. Drought insurance works by encapsulating the best available scientific estimate of drought probability and severity at a site within a single number- the insurance premium, which is offered by insurers to insurable parties in a transparent risk-sharing agreement. The proposed method is demonstrated in a case study for dry beans in Nicaragua.

Suggested Citation

  • Jacqueline Díaz Nieto & Myles Fisher & Simon Cook & Peter Läderach & Mark Lundy, 2012. "Weather Indices for Designing Micro-Insurance Products for Small-Holder Farmers in the Tropics," PLOS ONE, Public Library of Science, vol. 7(6), pages 1-11, June.
    • Handle: RePEc:plo:pone00:0038281
    DOI: 10.1371/journal.pone.0038281
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    References listed on IDEAS

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