This paper reviews recent advances in, and challenges for, weather index insurance for managing drought risk in smallholder agriculture, with a focus on sub-Saharan Africa. Despite its promise to integrate local agricultural risk smoothing with insurance principles, there remain many challenges to its mainstreaming in low income countries. Scaling up of weather index insurance pilot projects is particularly constrained by high-basis risk, related to the divergence between the calculated weather index and actual productivity loss on the farm. Various options may be considered to enhance uptake of weather index insurance. Linking reliable weather data with location-specific crop and agronomic conditions using flexible geospatial crop modeling tools is one option to reduce the basis risk. The other option is interlinking weather index insurance with credit or safety nets. In the end, insurance should be offered as part of a wider set of business services that provide real value to smallholders. Finally, the review acknowledges that the suggested conceptual solutions, especially interlinking index based weather insurance with credit will require more empirical evidence on the extent to which insurance would reduce the cost of borrowing and make credit more accessible to the smallholder farmers.

Purpose -The purpose of this paper is to investigate the impact of access to credit and safety nets on fertilizer adoption in rural Ethiopia. Design/methodology/approach -A panel data set collected in 2005 and 2007 on 278 households and over 5,700 plots from the Southern Highlands of Ethiopia is examined. The authors developed a theoretical model relating input use and credit contract under third-party credit collateral agreement. The estimation is based on instrumental variables regressions to account for the endogeneity of credit access, and safety nets in fertilizer demand equation.Findings -Despite increasing trends in fertilizer and improved varieties adoption since mid-2003, only 22 percent of the plots in the sample is actually received fertilizer. Households with more assets measured by livestock wealth are more likely to adopt fertilizer but less likely to participate in the local credit market as they have better savings that could be used to buy fertilizer/improved seeds without credit contract. This suggests poorer farmers heavily depend on credit than wealthier. Participation in safety nets programs did not contribute for increased use of fertilizer suggesting that the program either competes with agricultural labor or the low wage income was not enough to pay for farm inputs. Practical implications -The findings show that with a heavier reliance on credit by poorer farmers it appears that much might be gained by targeting policies toward increasing credit access to this group. Originality/value -Studies that utilize repeated plot-and household-level observations are limited. To the knowledge, this is the first study showing the relationship between credit accesses, public work program and fertilizer adoption over time in rural Ethiopia.

This study was aimed to generate information on variance components and the resulting genetic parameters (heritability, repeatability, genetic and phenotypic correlations and genetic trends) of some economic traits of Borena and its crosses with Holstein Friesian dairy cattle maintained at Holetta agricultural research center dairy farm. Traits studied were age at first service (AFS), age at first calving (AFC), calving interval (CI), days open (DO) and number of service per conception (NSC). Overall, 11331 dairy cattle reproductive performance records were used for the study. WOMBAT, which is a software package for quantitative genetic analysis of continuous traits, fitting a linear, mixed model; estimates of covariance components and the resulting genetic parameters were employed and obtained. Heritability values of reproductive traits were from very low (0.071, 0.082 and 0.012) for CI, DO and NSC to moderate (0.3 and 0.22) for AFC and AFS traits. Repeatability estimate for CI, DO and NSC were low (0.17, 0.17 and 0.129). Strong and positive genetic correlation (0.98) was appeared between AFS and AFC traits. Negative genetic correlations were observed between AFS and DO (-0.001), AFC and DO (-0.05), AFS and NSC (-0.022), AFC and NSC (-0.29) and CI and NSC (-0.31). AFS were negative phenotypic correlation with CI, DO and NSC. Similarly, AFC was negative phenotypic correlation with CI and DO. Low phenotypic correlation was observed between AFC and NSC, CI and DO, CI and NSC and, DO and NSC. Strong and positive phenotypic correlation was appeared between AFS and AFC. The regression coefficient of mean breeding value for NSC, CI, DO, AFC and AFS on year of birth were -0.0066x+13.25 times/year, -1.19x+2387.4 days/year, -1.23x+2445.6 days/year, 0.2x-410 months/year and 0.48x-980 months/year, respectively.

Index-based weather insurance is increasingly used to manage weather-related risks in smallholder agriculture. However, cash-constrained smallholders often lack the resources to pay an insurance premium, which may undermine its wider adoption. This article investigates alternative insurance payment methods that may help to enhance the adoption of index-based weather insurance. We use a choice experiment to elicit smallholders' willingness to pay in cash or labor for index-based weather insurance in four districts in the south-central highlands of Ethiopia. The insurance schemes were created using a fractional factorial design with three factors: work, cash, and payout rate. We analyze the choice data using a random parameter mixed logit model. We find that the average participants need a subsidy to pay cash for insurance because their willingness to pay is less than the expected cost of the insurance. On average, they are willing to pay only 0.81 ETB (Ethiopian currency) to get an expected yearly payout of 1 ETB. However, most are willing to participate in work-for-insurance programs at lower daily wage rates than is common for other work programs in Ethiopia.JEL classifications: G22, O12, Q18