The Promise of Agricultural Insurance
The economic and human development costs of uninsured risk have long been recognized. Recent advances in remote sensing and automated weather measurement open the door to innovative index insurance contracts that transfer correlated risk out of small farm economic systems. A small but compelling body of evidence confirms that index insurance achieves development objectives by inducing small farmers to boost their incomes by prudentially investing more in production (Ghana and Mali), and by reducing reliance on costly coping strategies in the wake of shocks (Kenya).
Carter, M.R. "Sharing the Risk and the Uncertainty: Public-Private Reinsurance Partnerships for Viable Agricultural Insurance Markets" Ferdi, Policy brief B78, October 2013
Codes JEL : D81 , Q1