Making index insurance attractive to farmers

There are several factors that influence whether people will want to participate in index insurance programs. A number of these influence their attractiveness on economic grounds, including both the size and timing of the premium and potential payouts, and the degree of risk aversion of the potential customers. Other factors make programs attractive for reasons that are not economic, but no less valid. These have to do with the trust that people have in the insurance product and the organizations involved in selling and managing it. Indeed, data from India, Africa, and South America show that these factors may be more important than the economic ones in influencing demand. Index insurance pilot projects, in order to estimate demand for alternative products, have typically involved a great deal of interaction with potential customers. It is important to recognize that such interaction is crucial not just as a research tool, but also as a means to build understanding and trust in the products. When scaling up from isolated pilots to operational programs, it is vital to recognize this trust building function by replicating participation efforts in every community. In this paper, we examine the role of field games in establishing and building trust in three important aspects of these projects for participants: trust in the insurance product, trust in the participating organizations, and trust in their own ability to make good decisions. While games have previously been used as a way to gauge interest in the product and to identify design features, we argue that these games are also valuable tools for constructing these kinds of trust.     

A Sensitivity Analysis of an Integrated Modelling Approach to Assess the Risk of Wind-borne Spread of Foot-and-mouth Disease Virus from Infected Premises

The sensitivity of an integrated model to assess the potential for wind-borne spread of foot-and-mouth disease (FMD) to variations in key parameters controlling different physical and biological processes was evaluated. The estimated number of farms at risk is sensitive to the virus strain used and the accompanying effective contact rate. The C Noville strain increased the estimated number of exposed farms ranked as high and medium risk of being infected by a factor of 5, compared to the baseline, based on the O UKG 2001 strain. The inclusion of a model for biological ageing of the virus can also have a significant effect on the concentration patterns arising from transport and dispersion of the virus. Its inclusion has the practical advantage of markedly reducing the time required for the calculations. The estimated number of farms affected by exposure to high and medium virus concentrations is not grossly sensitive to attenuation caused by temperature or relative humidity effects. Changes in susceptibility to infection, as determined by the parameter θ in the exposure-risk model, does not change the configuration of the virus plumes, but it does change the distribution of farms at risk by risk category. These findings suggest that a good understanding of characteristics (excretion rates from infected animals, susceptibility of different species to infection, virus survival, etc.) of the virus strain involved in an FMD outbreak is necessary to provide a reliable assessment of the risk of wind-borne spread. In the event of an incursion of FMD, provision for laboratory studies on the virus will be an essential component of the disease response and should be factored into contingency plans.