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Sequenced crop evapotranspiration and water requirement in developing a multitrigger rainfall index insurance and risk-contingent credit

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Title Sequenced crop evapotranspiration and water requirement in developing a multitrigger rainfall index insurance and risk-contingent credit
 
Creator Ndegwa, Michael K.
Shee, Apurba
Turvey, Calum
Liangzhi You
 
Subject precipitation
rain
evapotranspiration
insurance
 
Description Weather index insurance (WII) has been a promising innovation that protects smallholder farmers against drought risks and provides resilience against adverse rainfall conditions. However, the uptake of WII has been hampered by high spatial and intraseasonal basis risk. To minimize intraseasonal basis risk, the standard approaches to designing WII based on seasonal cumulative rainfall have been shown to be ineffective in some cases because they do not incorporate different water requirements across each phenological stage of crop growth. One of the challenges in incorporating crop phenology in insurance design is to determine the water requirement in crop growth stages. Borrowing from agronomy, crop science, and agrometeorology, we adopt evapotranspiration methods in determining water requirements for a crop to survive in each stage that can be used as a trigger level for a WII product. Using daily rainfall and evapotranspiration data, we illustrate the use of Monte Carlo risk modeling to price an operational WII and WII-linked credit product. The risk modeling approach that we develop includes incorporation of correlation between rainfall and evapotranspiration indices that can minimize significant intertemporal basis risk in WII.
 
Date 2022-01
2023-01-31T09:32:29Z
2023-01-31T09:32:29Z
 
Type Journal Article
 
Identifier Ndegwa, M.K., Shee, A., Turvey, C. and You, L. 2022. Sequenced crop evapotranspiration and water requirement in developing a multitrigger rainfall index insurance and risk-contingent credit. Weather, Climate, and Society 14(1):19–38.
1948-8335
https://hdl.handle.net/10568/128349
https://doi.org/10.1175/WCAS-D-21-0071.1
 
Language en
 
Rights Copyrighted; all rights reserved
Limited Access
 
Publisher American Meteorological Society
 
Source Weather, Climate, and Society