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The purpose of this research is examine the development of livestock mortality insurance, and associated challenges, in order to provide an improved understanding regarding the operation of livestock mortality insurance.

In a many countries, livestock mortality insurance has been either unavailable or underdeveloped. A descriptive analysis is provided regarding the background and development of livestock mortality insurance, along with an example.

Livestock mortality insurance is considerably more complex than crop insurance, and some of the complexities of livestock mortality insurance include multi‐stage production, consequential losses, occasional large event losses, animal health management, moral hazard, and adverse selection.

This study provides background and development information regarding livestock mortality insurance, and also highlights a number of important differences between livestock mortality insurance and crop insurance.

The purpose of this paper is to investigate the role that weather shocks can play in the livestock mortality microinsurance take-up when the insured risk has a prevalent covariant component.

The sample consists of 360 rural Ethiopian households. Data were collected in a panel-structure at the end of three agricultural seasons (2011-2013). In the questionnaire, a specific section on insurance was meant to collect information on the farmer’s willingness-to-pay (WTP) for a set of insurance products, including livestock mortality insurance. Two OLS regression models and a quantile regression model were employed to estimate the impact of weather anomalies on the WTP for the insurance product.

The authors find that weather anomalies contribute to changes in the WTP to a large extent. Negative (positive) changes in precipitation (temperature) anomalies can lead to more than a 30 percent reduction in the WTP. This general finding is complemented with the analysis of the conditional distribution of the WTP, which shows that other elements can prevail for low values of the conditional distribution. In this case, the WTP seems to be represented more by the interviewee’s age and basic knowledge of insurance, and village fixed-effects. Basic knowledge of insurance, in particular, can increase WTP by about 60 percent.

This paper has straightforward implications from a policy perspective. It suggests that farmers would prefer an insurance premium that follows the changes in the systemic component. On the contrary, insurance as well as reinsurance companies are usually reluctant to frequently revise their premiums. Financial education programs, farmer-driven design, trust building, and bundling insurance with other financial and non-financial products can increase the value proposition perceived by the farmers. From a marketing perspective, the overall findings suggest that continuous fine-tuning of the contract, transparency, and targeted information campaigns can contribute to increase and stabilize potential customers’ WTP.

To the best of the authors’ knowledge, this is the first paper that considers the impact of weather shocks on the WTP for a livestock mortality insurance product. Livestock is one of the most strategic assets of poor rural households in Africa. This study contributes to the theoretical and empirical literature on the determinants of weather insurance take-up in developing countries and, in particular, the role of spatiotemporal adverse selection and basis risk (e.g. Jensen et al., 2016).

This paper investigates Chinese agricultural insurance agents willingness to offer (WTO) livestock insurance based on the variations of eight main attributes of livestock insurance.

This study implements discrete choice experiments (DCE) with actual insurance agents who design, sell and operate livestock insurance in China. The choice experiment of this study is based on the D-optimal approach, a six-block design, with 15 cards per block and two choices per card. The sample size was 211. Econometrics results are based on conditional and mixed logit models.

The authors find that the subsidy effect is enormous; a one level increase of subsidy leads to 3.166 times higher probability to offer. This subsidy effect is important as it confirms the endogenous structure between price and quantity in insurance offering, where subsidy does not only incentivize demand but also the supply. Another main factor of insurance investigated is the impact of different coverage types on agents' WTO. The authors find that agents prefer mortality insurance the most, followed by revenue insurance and profit insurance, while Index-Based Livestock Insurance (IBLI) is the least preferred to offer. Agents' knowledge about these newer types of insurance supports their WTO as well; thus, proper education is necessary to promote the more advanced types of livestock insurance.

A limitation is that in the presence of COVID 19, and administrative issues at the local level, the sample was not randomly drawn. Nonetheless, the authors believe that there is enough diversity across participants, insurers and provinces and have done sufficient robustness checks to support results and conclusions.

This study provides further validation for the DCE research method that could potentially be applied to different analyses: using choice experiments to study insurers and reveal their preferences, through combinations of various levels of core attributes for insurance products. The findings and contribution are critical to the reform and improvement of livestock insurance in China and for insurance markets more broadly. The authors find that insurers do not place equal weights or values on insurance product attributes and do not view types of insurance equally. In other words, while farmers may hold different preferences about the type of insurance they demand, the results suggest that insurers also hold preferences in the type of insurance they sell.

So far as the authors are aware, this is the first DCE designed around the supply of insurance products with the subjects being insurance agents, marketers and executives.

China frequently suffers from weather‐related natural disasters and weather risk is recognized as a source of wide‐spread systemic risk throughout large swaths of China. During these periods farmers' crops are at risk and for a largely poor population few can afford the turmoil to livelihoods that goes along with drought. The purpose of this paper is to investigate the willingness of Shaanxi and Gansu farmers to purchase weather insurance.

This paper is based on surveyed results of 890 farm households in Shaanxi and Gansu provinces. The survey was designed specifically to extract willingness to pay for weather insurance. Factor affecting willingness to pay are explained using linear regression.

The authors find strong evidence that the demand for drought insurance is downward sloping and also believe from the analysis that the demand is fairly elastic. This suggests that price matters and the results suggest that in order for wide spread adoption of weather insurance farmers will require a substantial premium, perhaps in the order of 80 per cent, as is being applied to current crop insurance initiatives. The authors find, as expected, that crop producers would be willing to pay more for insurance than livestock producers, but also find, as one would expect, that the key indicator is risk. Using a Pert distribution, the authors constructed from information gathered from farmers the expected values and standard deviations of gross revenues and yields of the most prominent crop and constructed the coefficient of variation. It was found in both cases that the higher the CV the greater the willingness to pay.

The authors believe that this is the first willingness‐to‐pay study of weather insurance uptake in China. The authors used a unique “experimental” design and investigation technique to determine weather insurance demand.

Farmer exchange rate (FER) is the ratio between a farmer's income and expenditure and is also an indicator of farmers’ welfare. There is little research regarding its use in risk modeling in crop insurance. This study seeks to propose a design for a household margin insurance scheme of the agricultural sector based on FER.

This research employs various risk modeling concepts, i.e. value at risk, loss models and premium calculation, to construct the proposed model. The standard linear, static and time-varying copula models are used to identify the dependency between variables involved in calculating FER.

First, FER can be considered as the primary variable for risk modeling in agricultural household margin insurance because it demonstrates farmers’ financial ability. Second, temporal dependence estimated using the time-varying copula can minimize errors, reduce the premium rate and result in a tighter guarantee's level of security.

This research extends the previous similar studies related to the use of index ratio in margin insurance loss modeling. Its authenticity is in the use of FER, which represents the farmers' trading capability. FER determines farmers’ losses by considering two aspects: the farmers’ income rate and their ability to fulfill their life and farming needs. Also, originality exists in the use of the time-varying copulas in identifying the dependence of the indices involved in calculating FER.

The purpose of this paper is to provide an overview of the farm and rural credit system in China. To do this the authors use the so‐called “7 Cs” of credit (these include: Credit, Character, Capacity, Capital, Condition, Capability, and Collateral) and for each “C” provide some aspect of importance related to agricultural finance.

This paper is largely based on a survey of 897 farm households in Shaanxi and Gansu provinces, and extensive interviews of agricultural lenders conducted in the summer and fall of 2009. These data are used in simple form and in regression form to explain a variety of credit issues in China.

A number of key factors related to credit delivery and demand are found. First, using the 7 Cs as a guide proved to be very fruitful for disentangling the many institutional and cultural facets affecting rural credit in China. Under “Character” the authors discuss the cultural characteristics of the Chinese farmer in terms of informal lending and borrowing; under “Capacity” the authors discuss the challenges of delivering credit to farms with limited resources; under “Condition” the authors discuss group guarantees and credit worthy villages, credit rationing and insurance and incomplete markets; under “Capability” the authors discuss income inequality and challenges in economies of scale and size; and for “Collateral” the authors discuss the implications of lack of collateral and limitations on farm economic growth due to the collectivization of land and the potential for agricultural lending from the transferability and mortgagability of land or forestry use rights.

Although the assessment provides a great deal of breadth and depth across many credit‐related issues in China, it is not an exhaustive study. Agricultural and rural credit in China is very complex and in many instance under developed. The survey results from Shaanxi and Gansu tell a story that is consistently told throughout China, but the authors would caution against using the data to characterize farm credit across China as a whole.

Large swaths of China have either no or very rudimentary credit services. Even in areas where credit is in supply there are issues of poverty that could be aided with credit access and delivery. In order to improve livelihoods through credit institutions, it is important to understand rural credit in many dimensions. This paper takes a step in that direction.

Despite the importance of rural credit in China, it is largely understudied and not well understood. This paper makes progress in providing such an understanding. Our reasoning for using our unique approach is that by understanding the 7 Cs of credit one comes to understand the elemental characteristics of the credit decision from the lender's point of view but in a way that takes into account conditions at the farm level. The 7 Cs provide an objective approach to credit assessment that balances both the supply of and demand for credit.

The purpose of this paper is to explain the factors affecting farmers’ willingness to purchase weather index insurance for crops in China, in the Province of Hainan, and to also provide additional background information on weather index insurance.

A survey of 134 farmers was undertaken in Hainan, China, regarding their willingness to purchase weather index insurance. A probit regression model was used, and a number of variables were included to explain willingness of farmers to purchase weather index insurance.

In total, 11 of 15 variables in the model are found to be statistically significant in explaining farmers’ willingness to purchase weather index insurance.

First, farmers’ interest in weather index insurance may be limited due to basis risk. Second, some farmers may not sufficiently understand weather index insurance and so may not purchase it, and a considerable portion of farmers may also require a subsidy if they are to purchase weather insurance.

Weather index insurance may provide a lower cost alternative than traditional crop insurance, however, basis risk remains a main challenge.

This is the first study to quantitatively study the factors affecting the willingness of farmers to purchase weather index insurance for agriculture in the province of Hainan, China.

The purpose of this paper is to present the methods and findings of an experimental game designed to extend the concept of index‐based livestock insurance in northern Kenya, and analyze patterns of game play. The paper is designed to inform others who may be attempting something similar to this work in other developing country agricultural settings.

The paper presents the following: descriptive context of the issue, explanation of the game design to match the conditions in the area, details of how the authors explained the game, and regression analysis of play by participants.

Games designed to reflect key elements of the local production system can be an effective way of explaining financial products to rural producers in developing countries.

It remains to be seen if the extension effort leads to more informed consumers of insurance products, which the authors hope to address in future work. Also, the approach described in this paper is very labor intensive, which could limit use in a wide ranging extension program.

The authors were able to explain the idea to groups that were mixed: female and male. It will be interesting to see if there are any gender dimensions to insurance use. In addition, with competing claims to livestock with complex property rights, there is a need to monitor how insurance interacts with social ideas of livestock ownership.

This is a completely new idea in the area of arid and semi‐arid livestock production, the challenge is pronounced, and as insurance becomes more important in the development economics toolkit, the authors believe others can benefit from seeing what they have done.

Conceptualizing development in terms of risk management has become a prominent feature of mainstream development discourse. This has led to a convergence between the rubrics of financial inclusion and risk management whereby improved access for poor households to private sector credit, insurance and savings products is represented as a necessary step toward building “resilience.” This convergence, however, is notable for a shallow understanding of the production and distribution of risks. By naturalizing risk as an inevitable product of complex systems, the approach fails to interrogate how risk is produced and displaced unevenly between social groups. Ignoring the structural and relational dimensions of risk production leads to an overly technical approach to risk management that is willfully blind to the intersection of risk and social power. A case study of the promotion of index-based livestock insurance in Mongolia – held as a model for innovative risk management via financial inclusion – is used to indicate the tensions and contradictions of this projected synthesis of development and risk management.

This paper explores the emerging articulations between microfinance and livestock production cycles among Mongolian pastoralists in contexts plagued by disaster and commodity market fluctuations. Ethnographic investigations of household production and vulnerability in two rural districts of eastern and western Mongolia demonstrates that both poor and wealthy households have become ensnared in a cashmere-debt cycle but that the bifurcation of livestock asset trajectories between large and small herds has also fostered diverse financial and herd management strategies that further exacerbate existing inequalities.