Index Insurance : A Viable Solution for Irrigated Farming?
This paper documents the practical experience of deploying index insurance in a tropical country whose agriculture is dependent on dual sources of water: rainfall and irrigation. The paper introduces an innovative hybrid index insurance product bas...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/186891573136575004/Index-Insurance-A-Viable-Solution-for-Irrigated-Farming http://hdl.handle.net/10986/32664 |
| Summary: | This paper documents the practical
experience of deploying index insurance in a tropical
country whose agriculture is dependent on dual sources of
water: rainfall and irrigation. The paper introduces an
innovative hybrid index insurance product based on the
authors' experience of piloting the concept. The hybrid
product was created to address the higher basis risk of
using a single rainfall trigger that ignores the
hydrological conditions on the ground. The paper brings
forth findings from a live pilot in selected locations --
with varied agro-climatic conditions—in Sri Lanka under the
World Bank Group's Global Index Insurance Facility. The
findings indicate that the new hybrid product performs
better than the single trigger (rainfall-based) index
insurance product, thereby reducing the basis risk faced by
farmers. The paper also shares some of the practical
limitations in deploying the product. |
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