We paired drought-tolerant maize with index insurance designed to protect farmers when even drought-tolerant seeds fail. Only farmers using drought-tolerant seed bundled with index insurance bounced back quickly from severe shock seasons. After seeing the technologies work, they also increased their production to higher, pre-shock levels—a phenomenon we call Resilience+.
This study from Ghana found that index insurance lowers overall demand for agricultural loans while farmers appear to prefer micro-level insurance over meso‐level insurance. The study also shows that farmers are willing to pay to avoid basis risk.
This Spotlight illustrates how MQS works with three hypothetical datasets. While two of the three contracts fail MQS, each can be improved in different ways to provide greater value to farmers.
The gains from insurance arise from the transfer of income across states. This paper shows that the transfer of gains from insurance across time can help explain low insurance demand, especially among the poor, with results from a randomized control trial on a crop insurance product in Kenya which removes it.
