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Crop Disaster Assistance in Ukraine: Issues, Alternatives, and Consequences

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Publication date
17/07/2012
Number of Pages
21
Language:
English
Type of Publication:
Working Papers & Briefs
Focus Region:
Europe
Focus Topic:
Agricultural Value Chains / Agri-Businesses
Type of Risk:
Biological & environmental
Natural disasters
Type of Risk Managment Option:
Risk reduction/mitigation
Risk transfer
Commodity:
Crops
Author
Agriculture and Rural Development Department
Organization
The World Bank

Crop insurance based on a weather index is a feasible product for Ukraine. Such insurance could facilitate a wide array of innovative product developments within the emerging markets of Ukraine. This would allow Government of Ukraine to move away from subsidized traditional crop insurance programs that have proven to be very difficult and costly to administer in industrialized countries, in large part they tend to reward excessive risk taking by farmers. However, in order to make weather index insurance available on a larger scale, quality data and more automated weather stations need to be made available. This summary first reviews risk in agriculture and the insurance sector, and then it discusses agricultural insurance approaches and recommendations. This document is one of the few public papers clearly describing the process of designing weather-based index insurance products for agricultural applications.