Assessing the feasibility of a weather index insurance for the semi-arid region of Brazil

Weather index insurance (WII) has long been advertised as a viable alternative to overcome issues related to crop yield insurance products like information asymmetry and high transaction costs. WII products were firstly developed to assist climate-vulnerable farmers from developing countries where establishing a well-structured crop insurance market is expressively difficult due to the poor transport infrastructure and the prevalence of sparsely distributed small-scale farms. In Brazil, the semi-arid region stands out as the one that concentrates the ideal conditions for the implementation of a WII product since it houses thousands of climate-vulnerable family farmers. Seen this, the present study investigated the feasibility of a WII product for the Brazilian semi-arid region. A multidisciplinary approach based on meteorological, econometric and actuarial tools were employed, generating three distinct but complementary chapters. Firstly, it was shown that aridification is indeed a major threat to the livelihood of the population of the Brazilian semi-arid region. Secondly, it was identified that crop yield responses to weather conditions considerably vary in space and that an expressive portion of analyzed municipalities proved to have a low level of basis risk. Thirdly, a WII product was designed, priced and evaluated, proving to be effective in decreasing farmers’ downside risk. It is concluded, therefore, that it would be indeed feasible to establish a WII product in the semi-arid region of Brazil. Keywords: Feasibility. Weather Index Insurance. Brazil.

Grantor dc:publisher

Universidade Federal de Viçosa

Year dc:date.issued

2020

Author dc:creator

• Lavorato, Mateus Pereira

Advisor dc:contributor.advisor

• Braga, Marcelo José

Contributors dc:contributor

• Ozaki, Vitor Augusto

• Seguro agrícola
• Climatologia agrícola
• Clima de regiões áridas
• Estudos de viabilidade - Brasil

Statement dc:rights

• Acesso Aberto

Language dc:language.iso

eng

Repository record dc:identifier.uri

https://locus.ufv.br//handle/123456789/28320

OAI identifier oai:identifier

oai:locus.ufv.br:123456789/28320