A market infrastructure for environmental intangibles: the materiality and challenges of index insurance for agriculture in Senegal

Abstract

In Senegal, various development pilot projects experimented with agricultural index insurance to make drought insurable. These interventions produced 'rainfall deficit' as an environmental problem suited for such market-based solutions. Investigating the materiality of this index insurance scheme, I explore the environmental market infrastructure, which produces risk conventions, articulates governance and market requirements, and fuels the promise of cheap, efficient, and automated environmental risk management in the Global South. I show that the production of such risk requires both a selective reduction of the physical reality of drought and the substantial reordering of material activities that organize many actors around rainfall deficit. Meteorological data produced by rain gauges placed in Senegalese fields were a central element in the initial infrastructure of index insurance. However, as reductionist technologies are often prone to failure, this index insurance scheme met many challenges. After documenting the design of this insurance scheme and the obstacles encountered, the paper depicts how actors in charge of its implementation made a shift in the insurance infrastructure from field rain gauges to remote sensing-in order to re-energize index insurance's expectations.

Waiting for the market? Microinsurance and development as anticipatory marketization

“…It is therefore necessary to balance the improvements in skill gained by aggregating against the loss of representativity of local conditions … (Black et al, 2018: 202) Remote sensing, then, is nominally a cheaper and more precise infrastructure for index insurance, but introduces challenges of its own (cf. Angeli-Aguiton, 2021).…”

“…In practice, this has meant that index insurance schemes often have been accompanied by efforts at constructing a rather mundane infrastructure of rain gauges. As Angeli Aguiton (2021) shows particularly clearly in an analysis of index insurance programmes in Senegal, this is often a fraught, expensive, and labour-intensive process. Rain gauges need maintenance and checking.…”

“…Of these, moreover, 52.8 million (or, 96%) held some form of life insurance policy ( Allianz, 2017 ), the overwhelming majority of whom (46 million) were covered by one single group term life insurance scheme in India ( Allianz, 2017 : 12). Microinsurance, equally, often remains heavily reliant on subsidies (especially in non-life categories), with the expectation that at some point in the future microinsurers will be able to operate on a self-sustaining basis (see Angeli-Aguiton, 2021 ). By some distance the largest existing agricultural index insurance scheme, for instance, the Weather Based Crop Insurance Scheme in India, is a publicly subsidized, compulsory programme (see Clarke et al, 2012 ).…”

Commodifying a “Good” Weather Data: Commercial Meteorology, Low-cost Stations, and the Global Scientific Infrastructure

“…Indeed, the commercial challenge was to offer a weather forecast “at the plot’s scale” (according to the project manager), which means much more spatially and temporally accurate than other existing forecasts. When combined with public data, the observations from the stations were expected to be valuable: this is a common process in weather forecasting services, namely, that the infrastructure or the data precedes the market (Angeli Aguiton 2021). These data were new in several ways due to two recent technical innovations: the low-cost stations and the commercial development of low-rate communication networks that allowed digital objects to exchange small amounts of data at low speed, reducing the connectivity problem in rural areas.…”

“…Neoliberal policies applied to research funding since the 1980s have strengthened this relation through the commercialization of scientific data, the partial privatization of the activity of public research organizations, and the orientation of research programs toward businesses’ needs (Lave, Mirowski, and Randalls 2010). One illustration of this neoliberal framework is the development of open data policies during the 2000s: in the field of meteorology, they promoted a market-orientated production of data toward businesses’ needs and profitability (Bates 2014) and opened new financial markets that take advantage of weather and climate instabilities (Angeli Aguiton 2021). As weather data are considered a source of economic value, this commercialization impacts the global infrastructure.…”