Remote sensing data for managing climate risks: Index-based insurance and growth related applications for smallhold-farmers in Ethiopia

Hochrainer-Stigler, S., van der Velde, M., Fritz, S. ORCID: https://orcid.org/0000-0003-0420-8549, & Pflug, G.C. ORCID: https://orcid.org/0000-0001-8215-3550 (2014). Remote sensing data for managing climate risks: Index-based insurance and growth related applications for smallhold-farmers in Ethiopia. Climate Risk Management 6 27-38. 10.1016/j.crm.2014.09.002.

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Abstract

The aim of most climate related micro-insurance programs is to act as a social security mechanism to encourage investment among lower-income groups and raise overall investment and growth rates. Regarding the upcoming of new technologies such as availability of satellite data in high detail for large parts around the world as well as new methods to collect on field ground data there is the question how such new technologies could help in overcoming some of the problems from the demand as well as supply side in (micro-) insurance products. A method is suggested how risk reduction as well as growth objectives can be simultaneously introduced within a remote sensing index-based insurance framework. The applicability and usefulness of the approach is tested for smallhold farmers in North Shewa, Ethiopia. It is found that the use of remote sensing data is indeed a possible alternative to traditional weather based micro-insurance schemes and offer new ways to tackle current problems of such schemes from a supply side as well as demand side perspective.

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