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New Approaches to Crop Yield Insurance in Developing Countries

Author

Listed:
  • Skees, Jerry R.
  • Hazell, Peter B.R.
  • Miranda, Mario J.

Abstract

Natural disasters can be extremely disruptive to farmers and to others whose incomes depend on a successful crop. Society can gain from more efficient sharing of crop and natural disaster risks. However, the costs associated with traditional agricultural risk programs have historically exceeded the gains from improved risk sharing. This paper explores government intervention in agricultural risk markets and discusses new approaches to risk sharing with limited government involvement. In particular, we build the case for introducing negotiable state-contingent contracts settled on area crop yield estimates or locally appropriate weather indices. These instruments could replace traditional crop insurance at a lower cost to government while meeting the risk management needs of a wider clientele.

Suggested Citation

  • Skees, Jerry R. & Hazell, Peter B.R. & Miranda, Mario J., 1999. "New Approaches to Crop Yield Insurance in Developing Countries," EPTD Discussion Papers 42827, CGIAR, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:ags:eptddp:42827
    DOI: 10.22004/ag.econ.42827
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    References listed on IDEAS

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    Cited by:

    1. Abdulai, Awudu & Barrett, Christopher B. & Hazell, Peter B. R., 2004. "Food aid for market development in Sub-Saharan Africa," DSGD discussion papers 5, International Food Policy Research Institute (IFPRI).
    2. Hazell, Peter B.R., 2007. "Transformations in Agriculture and their Implications for Rural Development," eJADE: electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations (FAO), Agricultural and Development Economics Division (ESA), vol. 4(01), pages 1-19.
    3. Hazell, Peter B.R. & Oram, Peter A. & Chaherli, Nabil M., 2001. "Managing Droughts In The Low-Rainfall Areas Of The Middle East And North Africa," EPTD Discussion Papers 16069, CGIAR, International Food Policy Research Institute (IFPRI).
    4. di Gregorio, Monica & Hagedorn, Konrad & Kirk, Michael & Korf, Benedikt & McCarthy, Nancy & Meinzen-Dick, Ruth Suseela & Swallow, Brent M., 2008. "Property Rights, Collective Action, and Poverty: The Role of Institutions for Poverty Reduction," CAPRi Working Papers 44354, CGIAR, International Food Policy Research Institute (IFPRI).
    5. Carriquiry, Miguel A. & Osgood, Daniel E., 2008. "Index Insurance, Probabilistic Climate Forecasts, and Production," Hebrew University of Jerusalem Archive 6107, Hebrew University of Jerusalem.

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