A rising incidence of heat extremes, droughts and floods are increasing the vulnerability of rural producers and causes considerable challenges to maintain food security. In many transition economies, the mitigation of climate risks is challenged by underdeveloped financial markets and other lack of access to risk management in general.
A choice experiment approach
This talk features a project on analysing demand for innovative index based insurance in rain-fed grain production in Kyrgyzstan. During fieldwork conducted in summer 2018, we tested the acceptance of a set of market-based index insurance products as well as other risk-management instruments in an comprehensive choice-experiment setting among a sample of 144 Kyrgyz farmers. Results indicate a basic requirement for novel risk management strategies and a high interest in index-based insurance among Kyrgyz farmers in particular. Risk management choices are found to be influenced by personal characteristics of farm managers, farm characteristics, but also various group effects. Future research will focus on a more detailed analysis on the effects of risk management choices for agricultural production.