ASSESSMENT OF THE RISK MANAGEMENT POTENTIAL OF A RAINFALL BASED INSURANCE INDEX AND RAINFALL OPTIONS IN ANDHRA PRADESH, INDIA

Venkat N. Veeramani, Leigh Maynard and Jerry R. Skees

No 22183, 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Crop insurance is an alternative risk management technique available to farmers for stabilizing their revenue risk and schemes based on area yield have been in operation for quite some time. Here rainfall based insurance indices and options are suggested as a replacement for the expensive area yield programs. Instead of direct premium subsidies which are distorting, premium subsidy is taken as a function of adverse deviation of rainfall from the mean. A sensitivity analysis at different revenue elasticity levels with respect to rainfall was performed. Potential for private insurer's and reinsurer's participation exists with rainfall based index and options.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 22
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea03:22183

DOI: 10.22004/ag.econ.22183

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