Author:
Marija Koprivica ,Jelena Kočović ,Drago Cvijanović
Abstract
The paper deals with index-based crop insurance as a tool for managing flood and drought risks in agriculture. We introduce a novel model for determining premium rates in index-based crop insurance which combines the loss cost method and the average yield method. The proposed model was applied to data related to the production of selected crops in Serbia to calculate unique premium rates for index-based insurance for cereals, industrial crops and fodder plants. The paper also outlines the prerequisites for index-based crop insurance to become technically, operationally, and financially feasible in Serbia. We propose the introduction of mandatory index-based crop insurance, along with necessary legislative amendments and subsidization of insurance premiums.
Publisher
Balkan Scientific Association of Agricultural Economists
Reference48 articles.
1. Abdi, M. J., Raffar, N., Zulkafli, Z., Nurulhuda, K., Rehan, B. M., Muharam, F. M., Khosim, N. A., & Tangang, F. (2022). Index-based insurance and hydroclimatic risk management in agriculture: A systematic review of index selection and yieldindex modelling methods. International Journal of Disaster Risk Reduction, 67, 1-12, doi: 10.1016/j.ijdrr.2021.102653
2. Abramowitz, M., & Stegun, I. A. (eds) (1965). Handbook of mathematical formulas, graphs, and mathematical tables. Dover Publications Inc, New York.
3. Adjabui, J. A., Tozer, P. R., & Gray, D. I. (2019). Willingness to participate and pay for index-based crop insurance in Ghana. Agricultural Finance Review, 79(4), 491-507. doi: 10.1108/AFR-01-2019-0001
4. Ali, A. (2013). Farmers’ willingness to pay for index based crop insurance in Pakistan: a case study on food and cash crops of rain-fed areas. Agricultural Economics Research Review, 26(2), 241-248.
5. Angelidis, P., Maris, F., Kotsovinos, N., & Hrissanthou, V. (2012). Computation of Drought Index SPI with Alternative Distribution Functions. Water Resources Management, 26(9), 2453–2473. doi:10.1007/s11269-012-0026-0