Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa
This paper reviews recent advances in, and challenges for, weather index insurance for managing drought risk in smallholder agriculture, with a focus on sub-Saharan Africa. Despite its promise to integrate local agricultural risk smoothing with insurance principles, there remain many challenges to its mainstreaming in low income countries. Scaling up of weather index insurance pilot projects is particularly constrained by high-basis risk, related to the divergence between the calculated weather index and actual productivity loss on the farm. Various options may be considered to enhance uptake of weather index insurance. Linking reliable weather data with location-specific crop and agronomic conditions using flexible geospatial crop modeling tools is one option to reduce the basis risk. The other option is interlinking weather index insurance with credit or safety nets. In the end, insurance should be offered as part of a wider set of business services that provide real value to smallholders. Finally, the review acknowledges that the suggested conceptual solutions, especially interlinking index based weather insurance with credit will require more empirical evidence on the extent to which insurance would reduce the cost of borrowing and make credit more accessible to the smallholder farmers.
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Format: | Article biblioteca |
Language: | English |
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SpringerOpen
2015
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Subjects: | AGRICULTURAL SCIENCES AND BIOTECHNOLOGY, Index-Based Weather Insurance, Inter-Linkage, Credit, Safety Net, Weather Risks, INSURANCE, DROUGHT, SMALLHOLDERS, CREDIT POLICIES, SOCIAL SAFETY NETS, |
Online Access: | http://hdl.handle.net/10883/16943 |
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dig-cimmyt-10883-169432023-11-27T20:53:53Z Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa Tadesse, M. Shiferaw, B. Erenstein, O. AGRICULTURAL SCIENCES AND BIOTECHNOLOGY Index-Based Weather Insurance Inter-Linkage Credit Safety Net Weather Risks INSURANCE DROUGHT SMALLHOLDERS CREDIT POLICIES SOCIAL SAFETY NETS This paper reviews recent advances in, and challenges for, weather index insurance for managing drought risk in smallholder agriculture, with a focus on sub-Saharan Africa. Despite its promise to integrate local agricultural risk smoothing with insurance principles, there remain many challenges to its mainstreaming in low income countries. Scaling up of weather index insurance pilot projects is particularly constrained by high-basis risk, related to the divergence between the calculated weather index and actual productivity loss on the farm. Various options may be considered to enhance uptake of weather index insurance. Linking reliable weather data with location-specific crop and agronomic conditions using flexible geospatial crop modeling tools is one option to reduce the basis risk. The other option is interlinking weather index insurance with credit or safety nets. In the end, insurance should be offered as part of a wider set of business services that provide real value to smallholders. Finally, the review acknowledges that the suggested conceptual solutions, especially interlinking index based weather insurance with credit will require more empirical evidence on the extent to which insurance would reduce the cost of borrowing and make credit more accessible to the smallholder farmers. 1-21 2016-06-13T16:32:28Z 2016-06-13T16:32:28Z 2015 Article http://hdl.handle.net/10883/16943 10.1186/s40100-015-0044-3 English CIMMYT manages Intellectual Assets as International Public Goods. The user is free to download, print, store and share this work. In case you want to translate or create any other derivative work and share or distribute such translation/derivative work, please contact CIMMYT-Knowledge-Center@cgiar.org indicating the work you want to use and the kind of use you intend; CIMMYT will contact you with the suitable license for that purpose. Open Access PDF SUB SAHARAN AFRICA Germany SpringerOpen Springer Verlag Società Italiana di Economia Agraria 3 Agricultural and Food Economics 26 |
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AGRICULTURAL SCIENCES AND BIOTECHNOLOGY Index-Based Weather Insurance Inter-Linkage Credit Safety Net Weather Risks INSURANCE DROUGHT SMALLHOLDERS CREDIT POLICIES SOCIAL SAFETY NETS AGRICULTURAL SCIENCES AND BIOTECHNOLOGY Index-Based Weather Insurance Inter-Linkage Credit Safety Net Weather Risks INSURANCE DROUGHT SMALLHOLDERS CREDIT POLICIES SOCIAL SAFETY NETS |
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AGRICULTURAL SCIENCES AND BIOTECHNOLOGY Index-Based Weather Insurance Inter-Linkage Credit Safety Net Weather Risks INSURANCE DROUGHT SMALLHOLDERS CREDIT POLICIES SOCIAL SAFETY NETS AGRICULTURAL SCIENCES AND BIOTECHNOLOGY Index-Based Weather Insurance Inter-Linkage Credit Safety Net Weather Risks INSURANCE DROUGHT SMALLHOLDERS CREDIT POLICIES SOCIAL SAFETY NETS Tadesse, M. Shiferaw, B. Erenstein, O. Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa |
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This paper reviews recent advances in, and challenges for, weather index insurance for managing drought risk in smallholder agriculture, with a focus on sub-Saharan Africa. Despite its promise to integrate local agricultural risk smoothing with insurance principles, there remain many challenges to its mainstreaming in low income countries. Scaling up of weather index insurance pilot projects is particularly constrained by high-basis risk, related to the divergence between the calculated weather index and actual productivity loss on the farm. Various options may be considered to enhance uptake of weather index insurance. Linking reliable weather data with location-specific crop and agronomic conditions using flexible geospatial crop modeling tools is one option to reduce the basis risk. The other option is interlinking weather index insurance with credit or safety nets. In the end, insurance should be offered as part of a wider set of business services that provide real value to smallholders. Finally, the review acknowledges that the suggested conceptual solutions, especially interlinking index based weather insurance with credit will require more empirical evidence on the extent to which insurance would reduce the cost of borrowing and make credit more accessible to the smallholder farmers. |
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Article |
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AGRICULTURAL SCIENCES AND BIOTECHNOLOGY Index-Based Weather Insurance Inter-Linkage Credit Safety Net Weather Risks INSURANCE DROUGHT SMALLHOLDERS CREDIT POLICIES SOCIAL SAFETY NETS |
author |
Tadesse, M. Shiferaw, B. Erenstein, O. |
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Tadesse, M. Shiferaw, B. Erenstein, O. |
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Tadesse, M. |
title |
Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa |
title_short |
Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa |
title_full |
Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa |
title_fullStr |
Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa |
title_full_unstemmed |
Weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-Saharan Africa |
title_sort |
weather index insurance for managing drought risk in smallholder agriculture: lessons and policy implications for sub-saharan africa |
publisher |
SpringerOpen |
publishDate |
2015 |
url |
http://hdl.handle.net/10883/16943 |
work_keys_str_mv |
AT tadessem weatherindexinsuranceformanagingdroughtriskinsmallholderagriculturelessonsandpolicyimplicationsforsubsaharanafrica AT shiferawb weatherindexinsuranceformanagingdroughtriskinsmallholderagriculturelessonsandpolicyimplicationsforsubsaharanafrica AT erensteino weatherindexinsuranceformanagingdroughtriskinsmallholderagriculturelessonsandpolicyimplicationsforsubsaharanafrica |
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1787232888053301248 |