Contributions of Agricultural Systems Modeling to Weather Index Insurance

Climate exerts a profound influence on the lives of rural populations, particularly the rural poor, who depend on agriculture for livelihood and sustenance, who are unprotected against climate-related diseases, who lack secure access to water and food, and who are vulnerable to hydrometeorological hazard. Climate shocks such as drought and flooding lead not only to loss of life, but also long-term loss of livelihood through loss of productive assets, impaired health and destroyed infrastructure. The uncertainty associated with climate variability is a disincentive to investment and adoption of agricultural technologies and market opportunities, prompting the risk-averse farmer to favor precautionary strategies that buffer against climatic extremes over activities that are more profitable on average. Weather index insurance is one of several promising interventions for overcoming the negative impacts of climate risk on rural livelihoods and food security.