Performance of Temperature-Related Weather Index for Agricultural Insurance of Three Main Crops in China

International Journal of Disaster Risk Science, Mar 2017

In this study, two categories of weather index—absolute index and relative index—for chilling injury and heat damage of three main crops in China were assessed to identify insurable counties. First, correlations between selected weather indices and yield losses were examined for each county. If a correlation was significant, the county was categorized as “insurable” for the corresponding hazard or index. Second, the spatial distribution of insurable counties was characterized and finally, their correlation coefficients were analyzed at various spatial scales. The results show that the spatial patterns of insurable areas varied by categories of weather indices, crops, and hazards. Moreover, the weather indices based on relative threshold of temperature were more suitable for chilling injury in most regions, whereas the indices based on absolute threshold were more suitable for heat damage. The findings could help the Chinese government and insurance companies to design effective insurance products.

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Performance of Temperature-Related Weather Index for Agricultural Insurance of Three Main Crops in China

Int J Disaster Risk Sci Performance of Temperature-Related Weather Index for Agricultural Insurance of Three Main Crops in China Jing Zhang 0 1 Zhao Zhang 0 1 Fulu Tao 0 1 0 Institute of Geographical Sciences and Natural Resources Research, Chinese Academy of Sciences , Beijing 100101 , China 1 State Key Laboratory of Earth Surface Processes and Resource Ecology/Key Laboratory of Environmental Change and Natural Hazards, Academy of Disaster Reduction and Emergency Management, Faculty of Geographical Science, Beijing Normal University , Beijing 100875 , China In this study, two categories of weather indexabsolute index and relative index-for chilling injury and heat damage of three main crops in China were assessed to identify insurable counties. First, correlations between selected weather indices and yield losses were examined for each county. If a correlation was significant, the county was categorized as ''insurable'' for the corresponding hazard or index. Second, the spatial distribution of insurable counties was characterized and finally, their correlation coefficients were analyzed at various spatial scales. The results show that the spatial patterns of insurable areas varied by categories of weather indices, crops, and hazards. Moreover, the weather indices based on relative threshold of temperature were more suitable for chilling injury in most regions, whereas the indices based on absolute threshold were more suitable for heat damage. The findings could help the Chinese government and insurance companies to design effective insurance products. Chilling injury insurance; Heat damage; China; Crop; Weather index - Climatic variables are key controls on crop growth and determine yields, contributing to yield variability in China by as much as 41, 38, and 62% for maize, rice, and wheat, respectively (Ray et al. 2015). Agro-meteorological hazards usually have significant negative impacts on crop yield, especially temperature-related hazards. For such hazards, the upper threshold temperature (Tupper), optimum temperature (Topt), and lower threshold temperature (Tlower) have generally been used to characterize crop response to ambient air temperature (Qian et al. 2010; Wang et al. 2014). Extreme low (\Tlower) or high ( [ Tupper) temperature events may have severe consequences for crop yields; these are called chilling injury or heat damage in the present study. With ongoing climate change, more frequent and intense extreme-temperature events will become a major challenge to crop production (Wang et al. 2014; Zhang et al. 2014a, b; Chen et al. 2016). More attention has been given to the meteorological causes of crop failure and effects of agro-meteorological hazards (Challinor et al. 2005; Lobell and Field 2007; Tao et al. 2008, 2013; Zhang et al. 2014a, b, 2016), but very few studies have focused on how to reduce corresponding economic losses from agro-meteorological hazards, especially in China. As a measure of risk transfer for natural hazard-induced disasters, crop insurance may be used to shift various weather-related risks, and has become a prominent issue in many countries. However, studies and experience have concluded that traditional agricultural insurance is a very poor and unsustainable investment in lower income countries, owing to a preponderance of small farms and typical asymmetric information problems (Hazell 1992; Collier Fig. 1 Agricultural zoning maps of China. a Maize, b Rice, c Wheat et al. 2009). Without adverse selection and moral hazards, weather index-based insurance (WII) has shown tremendous potential for replacing traditional crop insurance, since the World Bank implemented a Development Marketplace Contract and put WII into practice in Nicaragua, Morocco, Tunisia, and Ethiopia (Skees 2001, 2008; Stoppa and Hess 2003; Hess and Syroka 2005; Anto?n et al. 2013). Similarly, WII has been regarded as an ideal alternative for traditional insurance in China (Boyd et al. 2011). Considering the portfolio of different weather index types and hazard strike levels strongly affecting spatial diversification of risk (Okhrin et al. 2013), more specific research was conducted in several regions of China. For example, surveys in Shaanxi, Henan, Gansu, and Anhui Provinces showed Chinese farmers had great willingness to adopt weather indices, for example excessive heat degree days (Turvey and Kong 2010; Liu et al. 2010). There have also been pilot programs regarding weather indices, such as the late spring chilling and dry hot wind indices for winter wheat (Yang et al. 2013) and excessive heat degree days index for rice (Yang et al. 2015) in Anhui Province. Results of these programs showed that to some extent WII provided objective economic compensation. However, there has been little systemic and comprehensive research on temperature-based index for the three main crops?maize, rice, and wheat?in China. Finding practical and reasonable indices that can capture weather fluctuations and be st (...truncated)


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Jing Zhang, Zhao Zhang, Fulu Tao. Performance of Temperature-Related Weather Index for Agricultural Insurance of Three Main Crops in China, International Journal of Disaster Risk Science, 2017, pp. 78-90, Volume 8, Issue 1, DOI: 10.1007/s13753-017-0115-z