Drought‐tolerant rice, weather index insurance, and comprehensive risk management for smallholders: evidence from a multi‐year field experiment in India

Patrick Ward (), Simrin Makhija and David Spielman

Australian Journal of Agricultural and Resource Economics, 2020, vol. 64, issue 2, 421-454

Abstract: In rainfed production systems throughout India, agricultural activities are dependent upon the summer monsoon, and any aberration in monsoon rainfall patterns can have severe consequences for rice production. There is considerable policy interest in designing programs to lower small‐scale farmers’ exposure to these types of risk given the regularity with which adverse monsoon events occur. This paper introduces a field experiment conducted with two risk management options in the state of Odisha: a drought‐tolerant rice cultivar; and a weather index insurance product designed to complement the performance of the cultivar. Uptake rates for the cultivar itself and for the joint product are compared across two years alongside an analysis of factors that predict uptake. Results indicate high levels of demand for both the products, albeit with a significant degree of price sensitivity. But this sensitivity is agnostic to the nature of price reductions, suggesting that public investments that lower the costs of risk management may be sufficient to encourage broad uptake, without necessarily relying upon distortionary subsidies as is so often done. Sustained demand between years one and two is primarily explained where individuals were indemnified in year one and had a large number of peers also purchasing the product.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.1111/1467-8489.12342

Related works:
Journal Article: Drought-tolerant rice, weather index insurance, and comprehensive risk management for smallholders: evidence from a multi-year field experiment in India (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ajarec:v:64:y:2020:i:2:p:421-454

Ordering information: This journal article can be ordered from
http://ordering.onli ... 1111/(ISSN)1467-8489

Access Statistics for this article

Australian Journal of Agricultural and Resource Economics is currently edited by John Rolfe, Lin Crase and John Tisdell

More articles in Australian Journal of Agricultural and Resource Economics from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().