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Copyright of Przeglad Prawa Rolnego is the property of Adam Mickiewicz University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Vegetation indices based on satellite images, such as Normalized Difference Vegetation Index (NDVI), have been used in countries like USA, Canada and Spain for damaged pasture and forage insurance for the last years. This type of agricultural insurance is called "satellite index-based insurance" (SIBI). In SIBI, the occurrence of damage is defined through NDVI thresholds mainly based on statistics derived from normal distributions. In this work a pasture area at the north of Community of Madrid (Spain) has been delimited by means of MODIS images. A statistical analysis of NDVI histograms was applied to seek for the best statistical distribution using maximum likelihood method. The results show that the normal distribution (NORMAL) is not the optimal representation and the General Extreme Value (GEV) distribution presents a better fit through the year. A comparison between NORMAL and GEV are showed respect to the probability under a NDVI threshold value along the year. This suggests that a priori distribution should not be selected and a percentile methodology should be used to define a NDVI damage threshold rather than the average and standard deviation, typically of normal distributions. [ABSTRACT FROM AUTHOR]

Concerns about hydrological drought risk and irrigation water supply reliability have grown in recent years due to the increasing demand for water for irrigation and other uses, and the decline in water availability due to climate change. Hydrological drought insurance hedging against water supply gaps can be a key instrument for adapting irrigated agriculture to this new scenario, since it improves the resilience of the irrigation sector, which is having to cope with increasing uncertainty and vulnerability. The objective of this paper is to assess farmers' willingness to pay (WTP) for index-based hydrological drought insurance under different policy designs, considering several different amounts of insured capital, insurance deductibles, and contract terms. To that end, it uses a discrete choice experiment as the valuation method and the Sector BXII irrigation district (southern Spain) as a case study. The results show that farmers would be willing to pay for the proposed hydrological drought insurance, stating a higher preference for policy designs with lower amounts of insured capital, lower deductibles, and shorter contract terms. Moreover, the results also show the existence of heterogeneity among farmers' preferences, depending on their socio-economic characteristics. Finally, we compare the distribution of farmers' WTP for different policy design options of the proposed insurance with the commercial premium estimated using actuarial analysis. The comparison confirms that only the options with lower levels of insured capital present a mean WTP below the commercial premium, while the rest of the policy design options would need to be subsidized like other agricultural insurance schemes to make them attractive to most farmers. • Farmers are willing to pay for hydrological drought insurance. • Farmers prefer policies with low levels of insured capital, low deductibles, and short contract terms. • WTP is heterogeneous depending on farmers' socio-economic characteristics. • Only policy designs with low levels of insured capital are currently commercially viable. • Once the new drought insurance is implemented, it will become more attractive for farmers. [ABSTRACT FROM AUTHOR]

This article aims at determining how the introduction of agricultural revenue insurance contracts in Spain will affect the cost of purchasing insurance, relative to yield insurance schemes. We focus our empirical analysis on the apple and orange sectors in Spain. Statistical copulas are used to jointly model price and yield perils. Premium rates under revenue and yield insurance are simulated through Monte Carlo methods. Results indicate that revenue insurance is likely to reduce the price of agricultural insurance in Spain, which may result in higher acceptance and demand for agricultural insurance programs. [ABSTRACT FROM AUTHOR]

An extension of guarantees related to rainfall-related risks in the insurance of processing tomato crops has been accompanied with a large increase in claims in Western Spain, suggesting that damages may have been underestimated in previous years. A database was built by linking agricultural insurance records, meteorological data from local weather stations, and topographic data. The risk of rainfall-related damages in processing tomato in the Extremenian Guadiana river basin (W Spain) was studied using a logistic model. Risks during the growth of the crop and at harvesting were modelled separately. First, the risk related to rainfall was modelled as a function of meteorological, terrain and management variables. The resulting models were used to identify the variables responsible for rainfall-related damages, with a view to assess the potential impact of extending insurance coverage, and to develop an index to express the suitability of the cropping system for insurance. The analyses reveal that damages at different stages of crop development correspond to different hazards. The geographic dependence of the risk influences the scale at which the model might have validity, which together with the year dependency, the possibility of implementing index based insurances is questioned. [ABSTRACT FROM AUTHOR]

Abstract: This paper presents the results of an innovative use of the Delphi technique to obtain quantitative information for the evaluation of the Official Adjustment Rules for Damage Assessment in agricultural insurance. An efficient insurance system must guarantee that loss adjustment is performed fairly and transparently, so that the continual review and modification of adjustment rules becomes especially important. The present study develops and applies a methodology based on the subjective information compiled by experts to evaluate the modification of the Specific Loss Adjustment Rule for Fruit Crops under real market conditions. The results show that the method employed comes forward as a valid option to provide reliable information, as well as other economic and social advantages, in the absence of alternative statistical sources. The validity of the study has been proved by its utility, as the results were extremely useful for drawing up a new Official Adjustment Rule. This application opens up an interesting field of development for this technique, which will enable the proposed methodology to be applied to similar studies in the context of agricultural insurance loss adjustment. [Copyright &y& Elsevier]

Copyright of Revista de Economía Aplicada is the property of Revista de Economia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

• New index-based insurance to cover irrigation water supply gaps is proved to be technically feasible. • Although the proposal is tailored to Spain, its main features can also be implemented worldwide. • An innovative actuarial analysis based on a stochastic hydrological model is implemented. • Simulation results show irrigation in southern Spain is expected to become more vulnerable to droughts. • New water management rules mean that the proposed insurance scheme has relatively high premiums. In Mediterranean-climate regions, irrigated agriculture is especially vulnerable to the risk of hydrological drought, and irrigators are particularly concerned about the negative effects of water supply failures. This paper proposes a new index-based drought insurance scheme to cover the risk of water supply failures in irrigated agriculture that overcomes the problems currently hindering the development of this kind of insurance, especially those related to arbitrariness in annual water allotments decision-making. Although the proposal is tailored to Spain, it can be easily adapted to other countries or regions because its main features can also be implemented worldwide. The scheme proposed is a promising instrument to help irrigators manage the risk related to hydrological droughts since it has been proved to be technically feasible. The main contribution of this paper is the innovative actuarial analysis implemented, which is aimed at calculating fair premiums. Considering that recent changes in the institutional framework (new demands, new storage capacity, and revised basin and drought management plans) make historical records unsuitable for this purpose, the actuarial analysis applied is based on a stochastic hydrological model able to simulate future hydrological situations under updated settings. Simulation results have shown that irrigated agriculture in southern Spain is expected to be more vulnerable to hydrological droughts. In fact, incidence rates are likely to increase because of the new institutional framework, leading to relatively high fair premiums. Only by implementing high ordinary deductibles can the hypothetical cost of commercial premiums be affordable for irrigators, accounting for less than 10% of their current variable costs. [ABSTRACT FROM AUTHOR]