Skip to main content

Drought risk in Nicaragua: a crop, region and technology-specific empirical evaluation

Buy Article:

$53.17 plus tax (Refund Policy)

Abstract:

Nicaraguan agriculture is largely rainfed. Drought risk is endemic, consistently wiping out large proportions of potential crop production. An insurance programme that would shift drought risk from farmers could therefore have significant welfare effects. A first step towards analysing drought insurance is the establishment of the empirical connection between rainfall levels and the risk of low returns to crop production. Having reviewed the nature of the agricultural insurance problem and the promise held out by drought insurance, we carry out a preliminary empirical analysis of drought risk. This is done by combining agronomic, economic and meteorological data to predict the probability that economic returns to a particular crop-region-technology combination will fall below a minimum. Four insights emerge: (1) Of the crops analysed, maize, sesame, soybeans and sorghum are the most affected by drought risk; (2) drought risk levels vary considerably across regions; (3) risk levels are also considerably affected by the choice of technology, the shifting of risks via insurance may remove a significant impediment to agricultural modernization; and (4) for some crops in some regions, the risk levels may be too high to allow successful operation of private drought insurance markets. Hence government subsidies may be in order.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/13669870152023818

Publication date: July 1, 2001

More about this publication?
routledg/rjrr/2001/00000004/00000003/art00006
dcterms_title,dcterms_description,pub_keyword
6
5
20
40
5

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more