Integrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi

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dc.creatorOsgood, Daniel E.
dc.creatorSuarez, Pablo
dc.creatorHansen, James
dc.creatorCarriquiry, Miguel
dc.creatorMishra, Ashok
dc.date2012-06-01T17:24:17Z
dc.date2012-06-01T17:24:17Z
dc.date2008-06
dc.date.accessioned2026-07-01T01:01:23Z
dc.descriptionClimate variability poses a severe threat to subsistence farmers in southern Africa. Two different approaches have emerged in recent years to address these threats: the use of seasonal precipitation forecasts for risk reduction (for example, choosing seed varieties that can perform well for expected rainfall conditions), and the use of innovative financial instruments for risk sharing (for example, index-based weather insurance bundled to microcredit for agricultural inputs). So far these two approaches have remained entirely separated. This paper explores the integration of seasonal forecasts into an ongoing pilot insurance scheme for smallholder farmers in Malawi. The authors propose a model that adjusts the amount of high-yield agricultural inputs given to farmers to favorable or unfavorable rainfall conditions expected for the season. Simulation results - combining climatic, agricultural, and financial models - indicate that this approach substantially increases production in La Niña years (when droughts are very unlikely for the study area), and reduces losses in El Niño years (when insufficient rainfall often damages crops). Cumulative gross revenues are more than twice as large for the proposed scheme, given modeling assumptions. The resulting accumulation of wealth can reduce long-term vulnerability to drought for participating farmers. Conclusions highlight the potential of this approach for adaptation to climate variability and change in southern Africa.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2008/06/9577543/integrating-seasonal-forecasts-insurance-adaptation-among-subsistence-farmers-case-malawi
dc.identifierhttps://hdl.handle.net/10986/6873
dc.identifierhttps://doi.org/10.1596/1813-9450-4651
dc.identifier.urihttp://hdl.handle.net/123456789/414332
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper; No. 4651
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectACCESS TO INFORMATION
dc.subjectAGRICULTURAL INPUTS
dc.subjectAGRICULTURAL OUTPUT
dc.subjectAGRICULTURAL PRODUCTION
dc.subjectAGRICULTURAL SECTOR
dc.subjectANNUAL INFLATION RATE
dc.subjectASYMMETRIC INFORMATION
dc.subjectBANK LOANS
dc.subjectBANKS
dc.subjectBENEFICIARIES
dc.subjectCHRONIC FOOD INSECURITY
dc.subjectCHRONIC MALNUTRITION
dc.subjectCLIMATE CHANGE
dc.subjectCLIMATE FLUCTUATIONS
dc.subjectCLIMATIC CHANGE
dc.subjectCOLLATERAL
dc.subjectCOMMODITY
dc.subjectCOMMODITY RISK MANAGEMENT
dc.subjectCONTRACT DESIGN
dc.subjectCREDIT CONSTRAINTS
dc.subjectCREDIT WORTHINESS
dc.subjectCROP INSURANCE
dc.subjectCROP LOSS
dc.subjectCROP PRODUCTION
dc.subjectCROP YIELD
dc.subjectCUSTOMER BASE
dc.subjectCYCLE OF POVERTY
dc.subjectDAMAGES
dc.subjectDERIVATIVE
dc.subjectDERIVATIVE MARKETS
dc.subjectDERIVATIVES MARKET
dc.subjectDERIVATIVES MARKETS
dc.subjectDEVELOPING COUNTRIES
dc.subjectDISASTER
dc.subjectDISASTER AID
dc.subjectDISASTER RISK
dc.subjectDISASTERS
dc.subjectDISTRIBUTION OF BENEFITS
dc.subjectDROUGHT
dc.subjectDROUGHT RISK
dc.subjectDROUGHTS
dc.subjectEARTHQUAKES
dc.subjectEASTERN EQUATORIAL PACIFIC
dc.subjectENSO
dc.subjectEXCHANGE RATE
dc.subjectEXPORTER
dc.subjectFARMER
dc.subjectFARMERS
dc.subjectFARMLAND
dc.subjectFINANCES
dc.subjectFINANCIAL EXPOSURE
dc.subjectFINANCIAL INSTRUMENTS
dc.subjectFINANCIAL MANAGEMENT
dc.subjectFINANCIAL RISK
dc.subjectFLOODS
dc.subjectFOOD AID
dc.subjectFOOD INSECURITY
dc.subjectFOOD SECURITY
dc.subjectGLOBAL CLIMATE SYSTEM
dc.subjectGROSS MARGINS
dc.subjectGROSS REVENUES
dc.subjectHOLDING
dc.subjectHOLDINGS
dc.subjectHOUSEHOLD SURVEY
dc.subjectHURRICANES
dc.subjectINCOME
dc.subjectINDEMNITY
dc.subjectINDIVIDUAL LOANS
dc.subjectINFLATION
dc.subjectINFLATION RATE
dc.subjectINFORMATION TECHNOLOGIES
dc.subjectINSTITUTIONAL CAPACITY
dc.subjectINSURANCE
dc.subjectINSURANCE COMPANY
dc.subjectINSURANCE CONTRACT
dc.subjectINSURANCE CONTRACTS
dc.subjectINSURANCE MARKETS
dc.subjectINSURANCE PREMIUM
dc.subjectINSURANCE PREMIUMS
dc.subjectINSURANCE SCHEME
dc.subjectINSURANCE SCHEMES
dc.subjectINSURER
dc.subjectINSURERS
dc.subjectINTEREST RATE
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL DEVELOPMENT
dc.subjectINTERNATIONAL STRATEGY FOR DISASTER REDUCTION
dc.subjectINVESTING
dc.subjectLABOR COSTS
dc.subjectLENDERS
dc.subjectLENDING PORTFOLIO
dc.subjectLIABILITY
dc.subjectLIFE EXPECTANCY
dc.subjectLOAN
dc.subjectLOAN SIZE
dc.subjectMARKET MECHANISMS
dc.subjectMATHEMATICS
dc.subjectMICRO-INSURANCE
dc.subjectMICROCREDIT
dc.subjectMICROFINANCE
dc.subjectMORAL HAZARD
dc.subjectNATURAL HAZARDS
dc.subjectPANDEMIC
dc.subjectPOLICY RESPONSES
dc.subjectPOOR
dc.subjectPOOR PEOPLE
dc.subjectPOVERTY LEVELS
dc.subjectPOVERTY LINE
dc.subjectPREDICTABILITY
dc.subjectPREMIUM PAYMENT
dc.subjectPROBABILITY
dc.subjectREINSURANCE
dc.subjectREPAYMENT
dc.subjectRISK ANALYSIS
dc.subjectRISK MANAGEMENT
dc.subjectRISK OF DEFAULT
dc.subjectRISK REDUCTION
dc.subjectRISK SHARING
dc.subjectRURAL
dc.subjectRURAL AREAS
dc.subjectRURAL BANKS
dc.subjectRURAL DEVELOPMENT
dc.subjectRURAL FARMERS
dc.subjectRURAL HOUSEHOLDS
dc.subjectSAFETY
dc.subjectSAFETY NETS
dc.subjectSALE
dc.subjectSEA SURFACE TEMPERATURE
dc.subjectSMALLHOLDER FARMERS
dc.subjectSOCIAL SAFETY NETS
dc.subjectSTAKEHOLDER
dc.subjectSTAKEHOLDERS
dc.subjectSTATE UNIVERSITY
dc.subjectSTOCKS
dc.subjectSUBSISTENCE FARMERS
dc.subjectSYSTEMIC RISK
dc.subjectTAX
dc.subjectTRANSACTION
dc.subjectTRANSACTION COSTS
dc.subjectTRANSPARENCY
dc.subjectTRANSPORT
dc.subjectTRUST FUND
dc.subjectURBAN DEVELOPMENT
dc.subjectVALUATION
dc.subjectVARIABLE COSTS
dc.subjectWEATHER DERIVATIVE
dc.subjectWEATHER DERIVATIVES
dc.titleIntegrating Seasonal Forecasts and Insurance for Adaptation among Subsistence Farmers : The Case of Malawi

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