Insuring Alpine Grasslands against Drought-Related Yield Losses Using Sentinel-2 Satellite Data

Abstract

This work estimates yield losses due to drought events in the mountain grasslands in north-eastern Italy, laying the groundwork for index-based insurance. Given the high correlation between the leaf area index (LAI) and grassland yield, we exploit the LAI as a proxy for yield. We estimate the LAI by using the Sentinel-2 biophysical processor and compare different gap-filling methods, including time series interpolation and fusion with Sentinel-1 SAR data. We derive the grassland production index (GPI) as the growing season cumulate of the daily product between the LAI and a meteorological water stress coefficient. Finally, we calculate the drought index as an anomaly of the GPI. The validation of the Sentinel-2 LAI with ground measurements showed an RMSE of 0.92 [m2 m−2] and an R2 of 0.81 over all the measurement sites. A comparison between the GPI and yield showed, on average, an R2 of 0.56 at the pixel scale and an R2 of 0.74 at the parcel scale. The developed prototype GPI index was used at the end of the growing season of the year 2022 to calculate the payments of an experimental insurance scheme which was proposed to a group of farmers in Trentino-South Tyrol.