Agricultural insurance in developing countries

Publication´s abstract

The paper describes the FAO position on agricultural insurance in developing countries (the limited role and the applicability of agricultural insurance), in particular for small farmers.

The paper discusses the following topics in the design of agricultural insurance in developing countries:

• Public versus private sector
• Yield insurance versus coverage against specified perils
• Voluntary versus compulsory farmer participation
• Procedures for setting indemnity and premium levels
• Collection of premiums and payment of indemnities
• Use of adequate loss adjustment mechanisms
• Financing insurance programmes
• Reserves and reinsurance
• Response to real risk management needs of farmers

The paper closes with a short case study on agricultural insurance in the Mexican coffee sector.