Linking Agricultural Index Insurance with Factors That Influence Maize Yield in Rain-Fed Smallholder Farming Systems

Abstract

Weather extremes pose substantial threats to food security in areas where the main source of livelihood is rain-fed crop production. In most of these areas, agricultural index insurance (AII) is recognized as being capable of securitizing food production by providing safety nets against weather-induced crop losses. Unfortunately, however, AII does not indemnify farmers for non-weather-related crop losses. This study investigates how this gap can be filled by exploring strategies through which AII can be linked with non-weather factors that influence crop production. We do this by using an improvised variable ranking methodology to identify these factors in the O.R. Tambo District Municipality, South Africa. Results show that key agrometeorological variables comprising surface moisture content, growing degree-days, and precipitation influence maize yield even under optimal weather conditions, while seed variety, fertilizer application rate, soil pH, and ownership of machinery play an equally important role. This finding is important because it demonstrates that although AII focuses more on weather elements, there are non-weather variables that may expose farmers to production risk even under optimal weather conditions. As such, linking AII with critical non-weather, yield-determining factors can be a better risk management strategy.