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

Antoine Leblois and Philippe Quirion

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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.

Keywords: agriculture; insurance; climatic risk (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-agr, nep-env, nep-ias and nep-ppm
Note: View the original document on HAL open archive server: https://hal.science/hal-00656778v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Published in Meteorological Applications, 2013, 20 (1), pp.1-9. ⟨10.1002/met.303⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00656778

DOI: 10.1002/met.303

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