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Index-based insurance for income stabilization for smallholder farms in Central Asia

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Title Index-based insurance for income stabilization for smallholder farms in Central Asia
 
Creator Bobojonov, Ihtiyor
 
Contributor Aw-Hassan, Aden A.
Biradar, Chandrashekhar
Nurbekov, Aziz
 
Subject index based
 
Description Climate change is one of the major challenges for agricultural producers worldwide. In Central Asian countries,
climate-driven irrigation water variability is a major source of risk. Future projections indicate even further
increase of production volatility in the region. Lack of financial mechanisms and high production risks are
major challenges hindering investment into climate smart technologies. Agricultural insurance therefore could
play an important role for reducing income volatility and create environment conducive to investment in the
region. However, current premium rates in the region (e.g. Kazakhstan and Uzbekistan) are very high,
associated with high operation and maintenance costs of the insurance companies. Insurance companies
explain the high operation costs by sparse and remote location of fields and need for several visits during the
vegetation period to reduce the moral hazard problem. Index-based insurance could help reducing the costs
associated with field visits as well as challenges associated with information asymmetry. However, suitability
of such insurance products is not tested in the region.
This study analyses the suitability of several index-based insurance tools to reduce income volatility in Central
Asia. Long-term yield records were available from five case study farms in different agroecological zones
(AEZs) of Central Asia. Index taken from remote sensing (NDVI, climate data) and climate stations as well as
irrigation water supply are used to design insurance products for wheat growers in Central Asia. Overall
analysis show that remote sensing based index insurance could serve as an important measure to reduce
income volatility and create favorable environment for investment in the region.
 
Date 2016-02-01T21:29:34Z
2016-02-01T21:29:34Z
 
Type Conference Paper
 
Identifier https://mel.cgiar.org/reporting/download/hash/JQIU7SQQ
Ihtiyor Bobojonov, Aden A. Aw-Hassan, Chandrashekhar Biradar, Aziz Nurbekov. (18/3/2015). Index-based insurance for income stabilization for smallholder farms in Central Asia. Paris, France.
https://hdl.handle.net/20.500.11766/3508
Open access
 
Language en
 
Rights CC-BY-NC-4.0
 
Format PDF
 
Publisher The French Agricultural Research Center for International Development (CIRAD)
 
Source CLIMATE-SMART Agriculture 2015;