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Uncertain monsoon,irrigation and crop yields: Implications for pricing of insurance products

Author

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  • Hardeep Singh

    (Indira Gandhi Institute of Development Research)

  • Digvijay S Negi

    (Indira Gandhi Institute of Development Research)

  • Pratap S. Birthal

    (ICAR-National Institute for Agricultural Economics and Policy Research)

Abstract

A significant body of literature interested in studying the impacts of weather risks on agricultural performance has modeled crop yields as a function of either levels or deviations in seasonal rainfall. However, an aspect that has received little attention in the literature relates to the impact of timing of arrival of monsoon on agricultural performance. In this paper, using a pan India district-level panel dataset for a period of 50 years, we investigate three interrelated issues that are critical for managing the weather-induced agricultural risks. One, we examine the impact of timing of arrival of monsoon on crop yields. Two, we assess the mitigation benefits of irrigation against delayed monsoon. And three, by simulating premium rates for an area yield insurance product at varying levels of irrigation coverage, we argue for differential pricing of insurance products for irrigated and rainfed crops or regions.

Suggested Citation

  • Hardeep Singh & Digvijay S Negi & Pratap S. Birthal, 2020. "Uncertain monsoon,irrigation and crop yields: Implications for pricing of insurance products," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2020-018, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2020-018
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    Cited by:

    1. Birthal, Pratap S. & Hazrana, Jaweriah & Negi, Digvijay S. & Mishra, Ashok K., 2022. "Assessing benefits of crop insurance vis-a-vis irrigation in Indian agriculture," Food Policy, Elsevier, vol. 112(C).
    2. Barooah, Prapti & Alvi, Muzna & Ringler, Claudia & Pathak, Vishal, 2023. "Gender, agriculture policies, and climate-smart agriculture in India," Agricultural Systems, Elsevier, vol. 212(C).

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    More about this item

    Keywords

    Monsoon onset; Crop yields; Irrigation; Crop insurance; Premiums;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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