Protecting insecure farmers

Video

Published 25.01.18
Photo credit:
McKay Savage

Lorenzo Casaburi on how timing is crucial for increasing crop insurance adoption among smallholder farmers. Pay-at-harvest premiums could be a solution.

The cost of crop insurance comes before the benefit of harvesting the crop, undermining demand for insurance, and thereby increasing farmers' vulnerability to risks. An experiment has revealed that pay-at-harvest premiums remove this gap, increasing demand for crop insurance from 5% to 72%. Even so, the interests of insurance companies also need to be accounted for in terms of contract enforcement in this high-risk sector.