Presentation
Agriculture Insurance
Topics: Region/Country: Language:
English

Agriculture Insurance

In Integrating Climate Change Adaptation and Disaster Risk Management in Plans and Investments Toward Inclusive and Sustainable Agricultural and Rural Development 2015-04

This presentation was prepared as a part of the online courseware for the course on "Integrating Climate Change Adaptation and Disaster Risk Management in Plans and Investments Toward Inclusive and Sustainable Agricultural and Rural Development' organized by the Faculty of Management and development studies of University of the Philippines Open University. The session has the following learning objectives: a) to Understand the idiosyncratic and covariate risks associated with agriculture production; b) to understand the risk management approaches to address the risks in agriculture production; and c) to evaluate the risk insurance as a risk management approach in agriculture.

Asia pacific region is highly vulnerable to climatic hazards. We have seen that farmers and governments are prone to financial burden. While there are several risk management options, we have seen that risk insurance is slowly gaining importance in the Asia pacific region for the benefits we discussed. For the insurance to be effective, it is important that the insurance premium prices are kept affordable while still being profitable for insurance companies. However, there is a need to move from traditional indemnity insurance approaches to index based approaches to avoid moral hazard, adverse selection and other costs. In terms of long term risk reduction, insurance in itself may not lead to long-term risk reduction if the risk price signal is not conveyed to the farmers and if the insurance is not mandatorily combined with risk mitigation options such as best management practices.

Related Website:
Publisher: 
SEARCA and UPOU
Page Information:
103