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Agricultural insurances based on meteorological indices: realizations, methods and research challenges

Author

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  • Antoine Leblois

    () (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Philippe Quirion

    () (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, LMD - Laboratoire de Météorologie Dynamique (UMR 8539) - UPMC - Université Pierre et Marie Curie - Paris 6 - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - Département des Géosciences - ENS Paris - ENS Paris - École normale supérieure - Paris)

Abstract

In many low-income countries, agriculture is mostly rainfed and crop yield depends highly 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, a full-scale implementation has been slow so far. In this article, the most advanced projects that have taken place in developing countries using these types of crop insurances are described. Following this, the methodology that has been used to design such projects in order to choose the meteorological index, the indemnity schedule and the insurance premium, is described. Finally the main research issues are discussed. In particular, more research is needed on implementation, assessment of benefits, how to deal with climate change, spatial variability of weather and interactions with other hedging methods.

Suggested Citation

  • Antoine Leblois & Philippe Quirion, 2013. "Agricultural insurances based on meteorological indices: realizations, methods and research challenges," Post-Print hal-00656778, HAL.
  • Handle: RePEc:hal:journl:hal-00656778
    DOI: 10.1002/met.303
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00656778
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    File URL: https://hal.archives-ouvertes.fr/hal-00656778/document
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    References listed on IDEAS

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    Cited by:

    1. Isaboke, Hezron Nyarindo & Qiao, Zhang & Nyarindo, Wilckyster Nyateko & Ke, Wang, 4. "Explaining The Perception Of Smallholders Towards Weather Index Micro-Insurance Alongside Risks And Coping Strategies," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(4).
    2. Ani Melkonyan & Malcolm Asadoorian, 2014. "Climate impact on agroeconomy in semiarid region of Armenia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(2), pages 393-414, April.
    3. Conradt, Sarah & Bokusheva, Raushan & Finger, Robert & Kussaiynov, Talgat, 2012. "Improving Accuracy of Technological Trend Estimations In Farm Yield Models by Taking Weather Effects Into Account," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126662, International Association of Agricultural Economists.
    4. Jensen, Nathaniel & Mude, Andrew & Barrett, Christopher, 2014. "How Basis Risk and Spatiotemporal Adverse Selection Influence Demand for Index Insurance: Evidence from Northern Kenya," MPRA Paper 60452, University Library of Munich, Germany.
    5. Conradt, Sarah & Bokusheva, Raushan & Finger, Robert & Kussaiynov, Talgat, 0. "Yield Trend Estimation in the Presence of Farm Heterogeneity and Non-linear Technological Change," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 53.
    6. repec:eee:jfpoli:v:74:y:2018:i:c:p:172-198 is not listed on IDEAS
    7. Nigus, Halefom & Nillesen, Eleonora & Mohnen, Pierre, 2018. "The effect of weather index insurance on social capital: Experimental evidence from Ethiopia," MERIT Working Papers 007, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Conradt, Sarah & Bokusheva, Raushan & Finger, Robert & Kussaiynov, Talgat, 2012. "Yield trend estimation in the presence of non-constant technological change and weather effects," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122541, European Association of Agricultural Economists.

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    Keywords

    agriculture; insurance; climatic risk;

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