Risk is inherent in agriculture. Farmers face a variety of market and production risks that make their incomes unstable and unpredictable from year to year. Input prices may increase out of reach, crops may be destroyed by drought or pest outbreaks, selling prices may plummet and harvests may rot in poor storage facilities. In many cases, farmers also confront the risk of natural catastrophe. Assets and lives may be lost due to severe droughts, hurricanes, earthquakes and floods. The type and severity of the risks confronting farmers are particularly burdensome to small-scale farmers in the developing world. Unless adequately managed, agricultural risks slow economic development, hamper poverty reduction and contribute to humanitarian crises.

While not a panacea for poverty, nor the sole solution for at-risk producers, index insurance shows great promise as a tool to reduce the severe effects of weather-related phenomena on people who depend on agricultural production for their livelihoods. 

Index insurance seems to be more effective when part of a larger package of risk management strategies and services. Given the consequences of global climate change, index insurance may also play a role in supporting adaptation strategies in developing countries. To be successful, index insurance will require great public and private investment, as well as a willingness to measure success objectively and adjust strategies accordingly.

Available in English and Spanish.

• Organisation: International Fund for Agricultural Development (IFAD)
• Pages: 153
• Année de publication: 2010
• Droit d'auteur: © International Fund for Agricultural Development and World Food Programme. 2010
• Url: https://www.ifad.org/documents/38714170/40239486/The+potential+for+scale+and+sustainability+in+weather+index+insurance+for+agriculture+and+rural+livelihoods.pdf/7a8247c7-d7be-4a1b-9088-37edee6717ca