Design principles for agricultural risk management policies

Glauber, Joseph W.; Baldwin, Katherine; Antón, Jesús; Ziebinska, Urszula

doi:10.1787/1048819f-en

Cited by 6 publications

(8 citation statements)

References 61 publications

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“…Adaptation beyond field-level agronomic interventions could be necessary when farm-level resilience is exceeded. Compound extremes science can be more deeply integrated into new or redesigned insurance policies and products 194,200,210 , and into investments in income stabilization 210 and other in-kind support such as the dissemination of seeds and fertilizers following an extreme event. These risk reduction approaches might influence the decisions of farmers to invest in adaptive technologies and management options 210 .…”

Section: Review Articlementioning

confidence: 99%

“…Compound extremes science can be more deeply integrated into new or redesigned insurance policies and products 194,200,210 , and into investments in income stabilization 210 and other in-kind support such as the dissemination of seeds and fertilizers following an extreme event. These risk reduction approaches might influence the decisions of farmers to invest in adaptive technologies and management options 210 . However, the availability of crop insurance does not always result in the adoption of climate-smart, conservation management practices 211,212 , and alternative management strategies (such as crop diversification 194 or precision agriculture techniques 213 ) might preferred to loss-limiting policies like crop insurance.…”

Section: Review Articlementioning

confidence: 99%

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Compound heat and moisture extreme impacts on global crop yields under climate change

Lesk

Anderson

Rigden

et al. 2022

Nat Rev Earth Environ

144

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Extreme heat, drought and moisture excess are increasingly co-occurring within a single growing season, impacting crop yields in global breadbasket regions. In this Review, we synthesize understanding of compound heat and moisture extremes, their impacts on global crop yields and implications for adaptation. Heat and moisture extremes and their impacts become compounded through crop-physiological interactions, heat-moisture couplings in the climate system and crop-atmosphere interactions. Since around 2000, these compound extremes, and hot droughts in particular, have been linked to especially poor harvests (up to 30% yield losses) in regions such as India, Ethiopia, the USA, Europe and Russia. However, in some cases, combinations of crop stresses might generate compensating effects. Compound extremes are projected to increase in frequency and amplitude in the future, but, owing to the biophysical interdependence among temperature, water and crop physiology, the net yield effects of such future compound extremes remain uncertain. Accordingly, compound extremes will necessitate comprehensive agricultural adaptation strategies geared towards multi-stress resilience, as adaptations that work for single climate stresses could be maladaptive under combined stresses. An integrated understanding of heat and water in soil-plant-atmosphere dynamics is urgently needed to understand risks and suitably adapt cropping systems to compounding climate impacts. Sections Compound extreme and crop impact dynamicsClimate impacts on crops can be compounded via three primary modes (Fig. 1). First, interactions among crop-physiological responses to different aspects of climate can worsen or ameliorate the ultimate yield effect (Fig. 1, green boxes). Second, heat-moisture interactions in the climate system can generate or amplify compound extremes, such as Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author selfarchiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

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Section: Review Articlementioning

confidence: 99%

Section: Review Articlementioning

confidence: 99%

Compound heat and moisture extreme impacts on global crop yields under climate change

Lesk

Anderson

Rigden

et al. 2022

Nat Rev Earth Environ

144

View full text Add to dashboard Cite

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“…Glauber et al [66] found that "subsidized crop insurance has been criticized for distorting resource allocation decisions, with impacts on the environmental sustainability of the sector. As a result, .…”

Section: Discussionmentioning

confidence: 99%

“…Our research results are consistent with previous empirical findings in developed countries. Glauber et al [66] underlined that subsidized agricultural insurance (in particular, crop insurance) lead to several distortions (production choices and input use). The aforesaid distortions can cause some externalities affecting "the environment, climate, nutrition and trade".…”

Section: Discussionmentioning

confidence: 99%

Crop Insurance, Land Productivity and the Environment: A Way forward to a Better Understanding

et al. 2021

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Providing farmers with effective risk management tools and increasing the productivity of factors of production, while limiting negative effects on the environment, is an important challenge for the current EU agricultural policy. The aim of this research is to identify and evaluate the relationship between crop insurance and land productivity in the context of environmental effects. The study covered farms with crop insurance participating in the Polish FADN system. The article uses the TOPSIS method of organizing objects. We classify farms in terms of land productivity and examine the relationship between these results and the value of insurance coverage. In our conceptual and empirical framework, we recognize that there is a mutual relationship between crop insurance, land productivity and the environment. Our empirical results show that the level of insurance coverage may support the increase in land productivity, indirectly affecting the environment. Farms with the highest productivity level were characterized by an average value of insurance that was double that compared to farms with the lowest productivity level.

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“…Lack of self-protection can result in substantial public expenditures. For instance, the OECD countries paid over €3 billion for agricultural disaster relief in response to natural disasters in 2017-2019(OECD, 2020. If the policy-makers want to improve the risk management policies and predict their impact, it is crucial for them to understand what motivates farmers to protect themselves against low-probability weather shocks.…”

Section: Introductionmentioning

confidence: 99%

Dealing with low‐probability shocks: The role of selected heuristics in farmers’ risk management decisions

Duden

Mußhoff

Offermann

2023

Agricultural Economics

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Dealing with weather extremes is a major challenge for farmers and often comes at high costs for public budgets. Therefore, we investigate the influence of specific simplified decision rules, so-called heuristics, on farmers' willingness to pay (WTP) for protecting themselves against low-probability and high-consequence weather shocks. To this end, we conducted a framed field experiment with 237 farmers in Germany, using incentivized lottery-based multiple price lists. We explored the effects of different heuristics within the prospect theory framework. Our results indicate that, on average, farmers exhibit risk-loving behavior towards monetary losses, leading to a low WTP for risk mitigation. The results also suggest that the imitation heuristic, shock experience heuristics, and the threshold of concern heuristic influence farmers' WTP. Farmers specifically imitate successful farmers when these are risk-loving. The lack of personal experience with low-probability events induces farmers to assign less weight to low-probability shocks, which lowers their WTP. Farmers also systematically assign less weight to low-probability shocks that they consider "too rare to be concerned about." Accounting for the use of these heuristics can help design improved risk management instruments and policies.

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Design principles for agricultural risk management policies

Cited by 6 publications

References 61 publications

Compound heat and moisture extreme impacts on global crop yields under climate change

Compound heat and moisture extreme impacts on global crop yields under climate change

Crop Insurance, Land Productivity and the Environment: A Way forward to a Better Understanding

Dealing with low‐probability shocks: The role of selected heuristics in farmers’ risk management decisions

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