For most smallholder farmers in the developing world, livelihoods are intertwined with agricultural production, and thus highly dependent on weather. As climate change is making the weather increasingly unpredictable, farmers experience greater production risks. Agricultural insurance can be an instrument to deal with those risks. It can also help meet the goals of the Paris Agreement – not only by compensating farmers for crop losses and other economic damage, but also by increasing smallholders’ ability to adapt to the adverse impacts of climate change, and by encouraging the adoption of low greenhouse gas emission approaches in agricultural production.
While agricultural insurance has been around for a long time, its adoption by smallholders around the world has been limited. Attempts to provide formal, indemnity-based crop insurance have struggled for various reasons. Most notably, conventional insurance suffers from high administrative and transaction costs, as well as asymmetric information between insured and insurer, which in turn gives rise to adverse selection and moral hazard. Index-based insurance programs designed to overcome these issues continue to suffer from low demand due to basis risk, lack of trust and farmer engagement, and poor understanding.
In this webinar, we will discuss two research-based innovations that aim to overcome these challenges: (1) bundling of index-based insurance products with novel climate-smart risk-reducing agricultural technologies and practices, and (2) the use of a new technology that uses smartphone photo data over time to create a new picture-based insurance product. The major advantage of field-based monitoring is that it can be used to reduce basis risk. We will present recent findings from research in India and Bangladesh.
When: 19 September 2018, 9-10 am EST
Presenters: Berber Kramer, research fellow, International Food Policy Research Institute (IFPRI) and Patrick S. Ward, assistant professor of environmental economics and policy, Duke Kunshan University.
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