Policy highlights:

  • Natural disasters such as droughts and floods reduce income and economic growth. In developing countries in particular, the potential risk of natural disasters hampers agricultural growth, as farmers are constrained in their access to finance and better yielding inputs because risk-averse lenders are unwilling to invest.
  • Insurance would be a viable solution: It acts as a shock absorber for farmers and other actors in the agricultural value chain and enables access to credit and better inputs as well.
  • One recommended form of insurance is the so-called weather index-based insurance product, which based on objective weather data as key indicator for payout, instead of actual observed ‘on-ground’ losses. This allows for a cost efficient and objective assessment as well as quick payment.
  • Farmers who are protected by such insurance will have better access to finance, greater resilience to shocks, and access to higher yielding inputs that will increase incomes. In addition, these products will allow banks to operate more efficiently and service providers to extend their reach and reduce rates.
Connected themes
Share this post

Related items

AERC Regional Policy Forum summary

The AERC hosted a virtual Regional Policy Forum on 28 March 2022. The forum brought together key stakeholders who play important roles in shaping new research findings, paving new policy directions, and initiating innovative practices in the areas of youth and employment.

Getting up to speed with inclusive development

The INCLUDE team’s reading list: March 2022 Every month we share with our readers a…

cairo-workers
Identifying Economic Sectors to Create Employment for Youth in Africa: key findings from selected country cases

Growth Sectors for Youth Employment (GSYE) is an African Economic Research Consortium (AERC) collaborative research…

John_maara_Photo_
Getting up to speed with inclusive development

The INCLUDE team’s reading list: February 2022

The world youngest continent is looking for work

The African continent is undergoing an important demographic transformation that will, for the better or the worse, drastically change its labor market. According to the World Bank, every year 12 million young people enter the job market while only 3 million formal jobs are created. With a median age of 25 years old, the African continent is the youngest in the world.

Maya Turolla Profile