Innovative agricultural insurance products and schemes

Farmers are exposed year round to a variety of risks, such as price variations, unfavourable weather, pests and diseases.
Such risks affect their income and welfare. If these risks act as a disincentive for further production, they can eventually reduce foreign exchange earnings and lead to reduced long-term productive investments in agriculture.
Agricultural insurance was developed to address the yield risks that are mainly due to adverse climatic conditions.
However, as agriculture has become more sophisticated, producers, marketing companies and bankers are demanding insurance to cover a greater number of risks.
Complying with this demand and in order to overcome the limitations of traditional agricultural insurance, in particular high transaction and loss assessment costs, new insurance products and schemes are continuously being developed, as are alternatives to the use of insurance.
This paper provides descriptions and examples of recently developed innovative agricultural insurance schemes and products. It also briefly considers alternatives to the use of insurance. It is designed to highlight risk management
techniques that could be adapted for use in developing countries and, as such, should be of interest to policy-makers, insurance companies, and farmer associations

      Agricultural insurance
AGS main series:
  Agricultural Management, Marketing and Finance Occasional Papers
  Myong Goo KANG
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