Abstract
This chapter discusses how to use high-resolution (compare to weather data) vegetation health (VH) indices derived from operational polar-orbiting satellites for crop insurance purposes. The experiment was done in two main grain-producing regions of Kazakhstan, which grow spring wheat. The results have shown that 16 km2 resolution of VH-based vegetation condition index (VCI) and the temperature condition index (TCI), derived from space during the critical period of crop growth, are excellent predictors of farmers’ wheat yields. The selected indices were used to design index-based insurance contracts by applying the copula approach. Empirical results for 47 grain-producing farms in the northern Kazakhstan show that insurance contracts built on the two VH-based indices can provide substantial risk reductions for a group of farms. For the entire sample, risk reduction was moderate. Providing reliable VH-based farmers’ insurance would simplify crop losses verification, make insurance cheaper, and provide compensation in case of drought impacts. These advantages would help farmers to survive in case of weather disasters and enhance food security situation. The effectiveness of insurance contracts can be improved using higher resolution (4 and 1 km2) satellite data and measuring indices at more disaggregated levels.
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Kogan, F. (2019). Vegetation Health for Insuring Drought-Related Yield Losses and Food Security Enhancement. In: Remote Sensing for Food Security. Sustainable Development Goals Series. Springer, Cham. https://doi.org/10.1007/978-3-319-96256-6_7
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