This paper considers the potential for securitizing index-based insurance products that transfer weather and natural disaster risks from lower income countries. The paper begins with a brief overview of why markets for natural disaster risks are important in lower income countries and a review...

Markets for transferring catastrophic risk in agriculture are woefully lacking in developing countries. Even in developed countries, markets for transferring the risk of crop losses caused by natural hazards generally exist only with large government subsidies. However, such subsidies can be...

This article focuses on innovation in weather insurance designed to fit the special circum-stances of the poor in lower income countries where rural and agricultural financial markets are largely underdeveloped. Index insurance is an innovation that circumvents many of the fundamental problems...

One of the key factors affecting the crop output is the rainfall volume. For this reason, insurance plans based on the rainfall deviation of the mean have been advanced. This paper provides prospects of rainfall-indexed insurance in Romania considering the tradeoff between moral hazard and basis...

Prototype inflow-based derivative contracts are designed to hedge irrigation risk in the Rio Mayo Valley of Sonora, Mexico. The results indicate that an 18-month contract is feasible given the specific characteristics of the region selected for the study.

Developing new risk management products for all agricultural commodities has increased in importance given recent legislation. Vegetables have been difficult to insure. This paper investigates the use of index contracts for growers belonging to a Kentucky vegetable cooperative. Index contracts...

Recent legislation has cleared the way for subsidized livestock price insurance. Such programs could increase production. Expected feeder cattle prices with and without subsidized insurance will be analyzed using E-V and Stochastic Dominance. Results will highlight the potential effects of the...

Crop insurance is an alternative risk management technique available to farmers for stabilizing their revenue risk and schemes based on area yield have been in operation for quite some time. Here rainfall based insurance indices and options are suggested as a replacement for the expensive area...

This paper presents a methodology for adding longer series of weather data to short series on Yield data for the purpose of Improving knowledge about crop Yield risk Findings demonstrate that the weather during the past 33 years provide Yield forecast with significantly less risk than the past...

U.S. farmers have for years relied on the financial support of both federally funded crop insurance and direct disaster assistance. Limits on availability of federal funds dictate that programs less costly to the government than disaster programs but more effective than past crop insurance...