Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi
Climate variability poses a severe threat to subsistence farmers in southern Africa. Two different approaches have emerged in recent years to address these threats: the use of seasonal precipitation forecasts for risk reduction (for example, choosi...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/06/9577543/integrating-seasonal-forecasts-insurance-adaptation-among-subsistence-farmers-case-malawi http://hdl.handle.net/10986/6873 |
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okr-10986-6873 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO INFORMATION AGRICULTURAL INPUTS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR ANNUAL INFLATION RATE ASYMMETRIC INFORMATION BANK LOANS BANKS BENEFICIARIES CHRONIC FOOD INSECURITY CHRONIC MALNUTRITION CLIMATE CHANGE CLIMATE FLUCTUATIONS CLIMATIC CHANGE COLLATERAL COMMODITY COMMODITY RISK MANAGEMENT CONTRACT DESIGN CREDIT CONSTRAINTS CREDIT WORTHINESS CROP INSURANCE CROP LOSS CROP PRODUCTION CROP YIELD CUSTOMER BASE CYCLE OF POVERTY DAMAGES DERIVATIVE DERIVATIVE MARKETS DERIVATIVES MARKET DERIVATIVES MARKETS DEVELOPING COUNTRIES DISASTER DISASTER AID DISASTER RISK DISASTERS DISTRIBUTION OF BENEFITS DROUGHT DROUGHT RISK DROUGHTS EARTHQUAKES EASTERN EQUATORIAL PACIFIC ENSO EXCHANGE RATE EXPORTER FARMER FARMERS FARMLAND FINANCES FINANCIAL EXPOSURE FINANCIAL INSTRUMENTS FINANCIAL MANAGEMENT FINANCIAL RISK FLOODS FOOD AID FOOD INSECURITY FOOD SECURITY GLOBAL CLIMATE SYSTEM GROSS MARGINS GROSS REVENUES HOLDING HOLDINGS HOUSEHOLD SURVEY HURRICANES INCOME INDEMNITY INDIVIDUAL LOANS INFLATION INFLATION RATE INFORMATION TECHNOLOGIES INSTITUTIONAL CAPACITY INSURANCE INSURANCE COMPANY INSURANCE CONTRACT INSURANCE CONTRACTS INSURANCE MARKETS INSURANCE PREMIUM INSURANCE PREMIUMS INSURANCE SCHEME INSURANCE SCHEMES INSURER INSURERS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL STRATEGY FOR DISASTER REDUCTION INVESTING LABOR COSTS LENDERS LENDING PORTFOLIO LIABILITY LIFE EXPECTANCY LOAN LOAN SIZE MARKET MECHANISMS MATHEMATICS MICRO-INSURANCE MICROCREDIT MICROFINANCE MORAL HAZARD NATURAL HAZARDS PANDEMIC POLICY RESPONSES POOR POOR PEOPLE POVERTY LEVELS POVERTY LINE PREDICTABILITY PREMIUM PAYMENT PROBABILITY REINSURANCE REPAYMENT RISK ANALYSIS RISK MANAGEMENT RISK OF DEFAULT RISK REDUCTION RISK SHARING RURAL RURAL AREAS RURAL BANKS RURAL DEVELOPMENT RURAL FARMERS RURAL HOUSEHOLDS SAFETY SAFETY NETS SALE SEA SURFACE TEMPERATURE SMALLHOLDER FARMERS SOCIAL SAFETY NETS STAKEHOLDER STAKEHOLDERS STATE UNIVERSITY STOCKS SUBSISTENCE FARMERS SYSTEMIC RISK TAX TRANSACTION TRANSACTION COSTS TRANSPARENCY TRANSPORT TRUST FUND URBAN DEVELOPMENT VALUATION VARIABLE COSTS WEATHER DERIVATIVE WEATHER DERIVATIVES |
| spellingShingle |
ACCESS TO INFORMATION AGRICULTURAL INPUTS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR ANNUAL INFLATION RATE ASYMMETRIC INFORMATION BANK LOANS BANKS BENEFICIARIES CHRONIC FOOD INSECURITY CHRONIC MALNUTRITION CLIMATE CHANGE CLIMATE FLUCTUATIONS CLIMATIC CHANGE COLLATERAL COMMODITY COMMODITY RISK MANAGEMENT CONTRACT DESIGN CREDIT CONSTRAINTS CREDIT WORTHINESS CROP INSURANCE CROP LOSS CROP PRODUCTION CROP YIELD CUSTOMER BASE CYCLE OF POVERTY DAMAGES DERIVATIVE DERIVATIVE MARKETS DERIVATIVES MARKET DERIVATIVES MARKETS DEVELOPING COUNTRIES DISASTER DISASTER AID DISASTER RISK DISASTERS DISTRIBUTION OF BENEFITS DROUGHT DROUGHT RISK DROUGHTS EARTHQUAKES EASTERN EQUATORIAL PACIFIC ENSO EXCHANGE RATE EXPORTER FARMER FARMERS FARMLAND FINANCES FINANCIAL EXPOSURE FINANCIAL INSTRUMENTS FINANCIAL MANAGEMENT FINANCIAL RISK FLOODS FOOD AID FOOD INSECURITY FOOD SECURITY GLOBAL CLIMATE SYSTEM GROSS MARGINS GROSS REVENUES HOLDING HOLDINGS HOUSEHOLD SURVEY HURRICANES INCOME INDEMNITY INDIVIDUAL LOANS INFLATION INFLATION RATE INFORMATION TECHNOLOGIES INSTITUTIONAL CAPACITY INSURANCE INSURANCE COMPANY INSURANCE CONTRACT INSURANCE CONTRACTS INSURANCE MARKETS INSURANCE PREMIUM INSURANCE PREMIUMS INSURANCE SCHEME INSURANCE SCHEMES INSURER INSURERS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL STRATEGY FOR DISASTER REDUCTION INVESTING LABOR COSTS LENDERS LENDING PORTFOLIO LIABILITY LIFE EXPECTANCY LOAN LOAN SIZE MARKET MECHANISMS MATHEMATICS MICRO-INSURANCE MICROCREDIT MICROFINANCE MORAL HAZARD NATURAL HAZARDS PANDEMIC POLICY RESPONSES POOR POOR PEOPLE POVERTY LEVELS POVERTY LINE PREDICTABILITY PREMIUM PAYMENT PROBABILITY REINSURANCE REPAYMENT RISK ANALYSIS RISK MANAGEMENT RISK OF DEFAULT RISK REDUCTION RISK SHARING RURAL RURAL AREAS RURAL BANKS RURAL DEVELOPMENT RURAL FARMERS RURAL HOUSEHOLDS SAFETY SAFETY NETS SALE SEA SURFACE TEMPERATURE SMALLHOLDER FARMERS SOCIAL SAFETY NETS STAKEHOLDER STAKEHOLDERS STATE UNIVERSITY STOCKS SUBSISTENCE FARMERS SYSTEMIC RISK TAX TRANSACTION TRANSACTION COSTS TRANSPARENCY TRANSPORT TRUST FUND URBAN DEVELOPMENT VALUATION VARIABLE COSTS WEATHER DERIVATIVE WEATHER DERIVATIVES Osgood, Daniel E. Suarez, Pablo Hansen, James Carriquiry, Miguel Mishra, Ashok Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi |
| geographic_facet |
Africa Malawi |
| relation |
Policy Research Working Paper; No. 4651 |
| description |
Climate variability poses a severe
threat to subsistence farmers in southern Africa. Two
different approaches have emerged in recent years to address
these threats: the use of seasonal precipitation forecasts
for risk reduction (for example, choosing seed varieties
that can perform well for expected rainfall conditions), and
the use of innovative financial instruments for risk sharing
(for example, index-based weather insurance bundled to
microcredit for agricultural inputs). So far these two
approaches have remained entirely separated. This paper
explores the integration of seasonal forecasts into an
ongoing pilot insurance scheme for smallholder farmers in
Malawi. The authors propose a model that adjusts the amount
of high-yield agricultural inputs given to farmers to
favorable or unfavorable rainfall conditions expected for
the season. Simulation results - combining climatic,
agricultural, and financial models - indicate that this
approach substantially increases production in La Niña years
(when droughts are very unlikely for the study area), and
reduces losses in El Niño years (when insufficient rainfall
often damages crops). Cumulative gross revenues are more
than twice as large for the proposed scheme, given modeling
assumptions. The resulting accumulation of wealth can reduce
long-term vulnerability to drought for participating
farmers. Conclusions highlight the potential of this
approach for adaptation to climate variability and change in
southern Africa. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Osgood, Daniel E. Suarez, Pablo Hansen, James Carriquiry, Miguel Mishra, Ashok |
| author_facet |
Osgood, Daniel E. Suarez, Pablo Hansen, James Carriquiry, Miguel Mishra, Ashok |
| author_sort |
Osgood, Daniel E. |
| title |
Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi |
| title_short |
Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi |
| title_full |
Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi |
| title_fullStr |
Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi |
| title_full_unstemmed |
Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi |
| title_sort |
integrating seasonal forecasts and insurance for adaptation among subsistence farmers : the case of malawi |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/06/9577543/integrating-seasonal-forecasts-insurance-adaptation-among-subsistence-farmers-case-malawi http://hdl.handle.net/10986/6873 |
| _version_ |
1764401034640228352 |
| spelling |
okr-10986-68732021-04-23T14:02:32Z Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi Osgood, Daniel E. Suarez, Pablo Hansen, James Carriquiry, Miguel Mishra, Ashok ACCESS TO INFORMATION AGRICULTURAL INPUTS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR ANNUAL INFLATION RATE ASYMMETRIC INFORMATION BANK LOANS BANKS BENEFICIARIES CHRONIC FOOD INSECURITY CHRONIC MALNUTRITION CLIMATE CHANGE CLIMATE FLUCTUATIONS CLIMATIC CHANGE COLLATERAL COMMODITY COMMODITY RISK MANAGEMENT CONTRACT DESIGN CREDIT CONSTRAINTS CREDIT WORTHINESS CROP INSURANCE CROP LOSS CROP PRODUCTION CROP YIELD CUSTOMER BASE CYCLE OF POVERTY DAMAGES DERIVATIVE DERIVATIVE MARKETS DERIVATIVES MARKET DERIVATIVES MARKETS DEVELOPING COUNTRIES DISASTER DISASTER AID DISASTER RISK DISASTERS DISTRIBUTION OF BENEFITS DROUGHT DROUGHT RISK DROUGHTS EARTHQUAKES EASTERN EQUATORIAL PACIFIC ENSO EXCHANGE RATE EXPORTER FARMER FARMERS FARMLAND FINANCES FINANCIAL EXPOSURE FINANCIAL INSTRUMENTS FINANCIAL MANAGEMENT FINANCIAL RISK FLOODS FOOD AID FOOD INSECURITY FOOD SECURITY GLOBAL CLIMATE SYSTEM GROSS MARGINS GROSS REVENUES HOLDING HOLDINGS HOUSEHOLD SURVEY HURRICANES INCOME INDEMNITY INDIVIDUAL LOANS INFLATION INFLATION RATE INFORMATION TECHNOLOGIES INSTITUTIONAL CAPACITY INSURANCE INSURANCE COMPANY INSURANCE CONTRACT INSURANCE CONTRACTS INSURANCE MARKETS INSURANCE PREMIUM INSURANCE PREMIUMS INSURANCE SCHEME INSURANCE SCHEMES INSURER INSURERS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL STRATEGY FOR DISASTER REDUCTION INVESTING LABOR COSTS LENDERS LENDING PORTFOLIO LIABILITY LIFE EXPECTANCY LOAN LOAN SIZE MARKET MECHANISMS MATHEMATICS MICRO-INSURANCE MICROCREDIT MICROFINANCE MORAL HAZARD NATURAL HAZARDS PANDEMIC POLICY RESPONSES POOR POOR PEOPLE POVERTY LEVELS POVERTY LINE PREDICTABILITY PREMIUM PAYMENT PROBABILITY REINSURANCE REPAYMENT RISK ANALYSIS RISK MANAGEMENT RISK OF DEFAULT RISK REDUCTION RISK SHARING RURAL RURAL AREAS RURAL BANKS RURAL DEVELOPMENT RURAL FARMERS RURAL HOUSEHOLDS SAFETY SAFETY NETS SALE SEA SURFACE TEMPERATURE SMALLHOLDER FARMERS SOCIAL SAFETY NETS STAKEHOLDER STAKEHOLDERS STATE UNIVERSITY STOCKS SUBSISTENCE FARMERS SYSTEMIC RISK TAX TRANSACTION TRANSACTION COSTS TRANSPARENCY TRANSPORT TRUST FUND URBAN DEVELOPMENT VALUATION VARIABLE COSTS WEATHER DERIVATIVE WEATHER DERIVATIVES Climate variability poses a severe threat to subsistence farmers in southern Africa. Two different approaches have emerged in recent years to address these threats: the use of seasonal precipitation forecasts for risk reduction (for example, choosing seed varieties that can perform well for expected rainfall conditions), and the use of innovative financial instruments for risk sharing (for example, index-based weather insurance bundled to microcredit for agricultural inputs). So far these two approaches have remained entirely separated. This paper explores the integration of seasonal forecasts into an ongoing pilot insurance scheme for smallholder farmers in Malawi. The authors propose a model that adjusts the amount of high-yield agricultural inputs given to farmers to favorable or unfavorable rainfall conditions expected for the season. Simulation results - combining climatic, agricultural, and financial models - indicate that this approach substantially increases production in La Niña years (when droughts are very unlikely for the study area), and reduces losses in El Niño years (when insufficient rainfall often damages crops). Cumulative gross revenues are more than twice as large for the proposed scheme, given modeling assumptions. The resulting accumulation of wealth can reduce long-term vulnerability to drought for participating farmers. Conclusions highlight the potential of this approach for adaptation to climate variability and change in southern Africa. 2012-06-01T17:24:17Z 2012-06-01T17:24:17Z 2008-06 http://documents.worldbank.org/curated/en/2008/06/9577543/integrating-seasonal-forecasts-insurance-adaptation-among-subsistence-farmers-case-malawi http://hdl.handle.net/10986/6873 English Policy Research Working Paper; No. 4651 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa Malawi |