Index insurance for farmers, a decade of pilots later
Agricultural and index insurance appear on 20 recent papers, split between the finance and economics journals. Weather index insurance was meant to protect smallholders cheaply, but take-up stayed low and basis risk high. With satellite data and mobile payments, is it finally working, and where?
What prompted this
Since October 2025, 20 papers carry an index-insurance, crop-insurance, agricultural-insurance or weather-insurance keyword (9 in finance journals, 7 in economics): "agricultural insurance" on 16, "index insurance" on 3, "crop insurance" on 2. Climate shocks, by contrast, are one of the fastest-growing keywords in the economics journals.
Questions
- Do satellite-based indices (vegetation, soil moisture) track farm losses better than rainfall at a weather station, and does better tracking raise take-up?
- Do bundled products (insurance with credit, seed or mobile money) reach farmers who would not buy insurance alone?
- When insured farmers are paid after a drought, do they invest more in the next season than uninsured neighbours?
Data that could help
Insurance programme enrolment and payout records, satellite indices, farm surveys with yields and investment, and mobile money data.
Next step
Compare the correlation of farm-level losses with rainfall-based and satellite-based indices in one programme that switched from one to the other.