ALTERNATIVES TO CROP INSURANCE
Implemented by NGO
A noteworthy obstruction to the commercialization of the small farmer is the enhanced unpredictability of the market place, evaluated with subsistence cultivating. The issue is exacerbated by the fact that it has not as much of ability to absorb the peril of loss. Purchasing insurance policy does not appear to be a workable approach, as the rates to cover these risks appear to be too high. Thus, government, policy-makers, and insurance companies are engaged in finding a blend of subsidies (for reducing premium) and distinctive sorts of insurance products to resolve the issue. An alternative is possible, one that can be implemented by NGOs who will have a low transaction cost of providing
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In the alternative being proposed here, the farmer is called upon to make a payment only after it has been verified that the crop is good and the farmer has the ability to pay. Perhaps an even bigger advantage is the 'credibility' of the proposed arrangement.
As it involves quite a large amount of money and makes it possible for NGOs to enter into the business, insurance providers who have knowledge about individual insurance buyers (avoiding adverse selection) as well as being in a position to monitor them (preventing moral hazard). NGOs providing micro- finance have worked out innovative methods of doing both of these. In principle, therefore, the NGOs have a lower transaction cost of providing insurance cover to small farmers. However, the requirement of the paid-up capital makes it very difficult for the NGOs to become insurance
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The recent years have seen a change in this trend with the emergence and rising popularity of weather-based insurance products. Weather insurance pays indemnities based not on the actual losses experienced by the insured, rather on the realization of a weather index that is highly correlated with actual losses. The index measures a specific weather variable (e g, rainfall, temperature, relative humidity, wind speed, etc) rather than the extent of loss (in crop yield). In other words, the product proxies the loss that farmers face owing to the adverse weather incidence.
The weather insurance product is designed after a critical study of the weather parameters affecting crop growth in its three critical phases - sowing, growth and flowering, and yield formation to harvest. During each period, the "trigger" (level below which weather parameter must fall for a farmer to begin receiving the payouts) and "exit" levels (level below which the weather parameter must drop for a farmer to receive the maximum payout) are defined. No additional indemnity is paid for realized values of the index that exceeds the exit
An Oxford University graduate, Jonathan Swift, in his article, A Modest Proposal, proposes a solution to Irelands growing poverty in the 18th century by proposing the selling and eating of innocent babies. Swift’s purpose is to state the benefits that the poor would gain from selling their one year old children to the wealthy to eat them. He takes on a concerning tone in order to convince the people of Ireland to consider and adopts his obscene plan.
Already scientists have observed that more than 75% of the recent economic losses are caused by natural hazards which can be attributed to wind storms, floods, droughts and other climate related hazards. In the year 2008, the U.S. state of Iowa was on the front pages of newspapers all around the world. Weeks of heavy rain in the Midwest caused rivers to swell and levees to break. Millions of acres of farmland are now underwater, their plantings most likely destroyed. By March, Iowa had tied its third-highest monthly snowfall in 121 years of record keeping, and then came the rain. April’s st...
The Midwestern United States has experienced flooding for a long time now, but recently the annual precipitation has been far greater than before. Precipitation has increased 37 percent since 1958 (Jeff Spross). However a few major floods have been recorded dating back to 1913. In 1913 torrential rainfall hit Indiana and Ohio. The ground was greatly damaged from the flood causing difficult agricultural years for many years after the flood. Another flood hit a large portion of the Midwest region including the eastern Dakotas, Wisconsin, Kansas, and Indiana in 1993. Recovery costs for the Great Flood exceeded $4.2 billion. Like the flood in 1913 agriculture was affected for many years hurting the economy of the Midwest. A more recent disastrous flood hit mainly Iowa in 2008. After the flood in 2008 agriculture again took a hard hit and since the government ...
Since the beginning of the 19th century, America has had to deal with the on going
Farmers face many problems such as, a corrupt monetary policy, overproduction, and differential freight rates. The complaints of the farmers are justified because with the correction of these issues the farmers would continue with successful business. Each of the problems caused the farmers to lose money and become where they could not afford to run the businesses anymore, therefore, causing even more failure within the farming occupation.
Jonathan Swift in his “Modest Proposal” introduces a problem of poverty to his audience. The purpose of writing this piece is to warn the audience about some major problems. This piece is generally directed towards the general people because he doesn’t specifically direct it towards anyone in particular.
People have been trying to come up with solutions to threatening epidemics from many years. There was a famine in Ireland that killed many people. The poor people of Ireland could not support their families, which made them go to extreme measures. In order to survive, women and children were forced to beg for food to prevent them from starving to death. Jonathan Swift proposes a solution to this epidemic in A Modest Proposal. Swift states that the poor Irish should sell their children as if they were cattle, or better yet, eat the children themselves. Swift uses a mocking tone in order to effectively convey that he does not actually support cannibalism, but rather uses it as metaphor to describe the harsh times of Ireland.
The weather in this novel controls their crops and the river flow; which controls their food and water supply. They depend on adequate rainfall to help their crops to grow and for the river to be full. They also depend on the sun to warm things up and make the crops grow. However, if there is too much rain or too much sun it can cause many problems, such as a drought or a flood. These things are significant in this novel, because t...
Insurance is as ancient as Babylon. The first policy dates back to 2100 B.C.; specifically, it is the Code of Hammurabi. A loan from a trader made certain his valuable cargo traveled safe from the harm of thieves or storms (Marples). The term changed drastically through the ages, and insurance is now a mess of premiums, tiers, and co-payments. It may most commonly be known as a negative number on a check stub that ensures health and safety. There exists not one company that covers everything on just one plan, but a step forward may change that.
In the 1980s, many farmers in the Midwest were running out of business rapidly and found that they could not stay in the agriculture indust...
In Jonathan Swift’s satire, “A Modest Proposal”, Swift writes about the starving people of Ireland in the early 1700’s. He makes a wild and absurd proposal to help remedy the problems of overpopulation and poverty. Swift wants to make a political statement by using the “children” as satire to grasp the attention of the audience - the English people, the Irish politicians and the rich – and make them aware of the political, moral, and social problems. In “A Modest Proposal”, Swift’s arguments are presented effectively by using pathos (emotional appeal), ethos (ethics and values), and logos (logic reasoning and facts).
According to the article “Food” from the Union of Concerned Scientist, “shifting seasonal rainfall patterns and more severe precipitation events—and related flooding—may delay planting and harvesting” (“Food”). Much of agriculture depends on consistent patterns of sunlight and rainfall. However due to global warming, inconsistent patterns of rain from periods of droughts to flooding can occur. This will make it extremely difficult to grow plants. If farmers cannot grow plants, there will be a shortage in fruits and vegetables available. This will also affect the wallet, because due to shortage of plants growing, prices will be raised so farmers and grocery stores can still make a profit. Inconsistent rain patterns will greatly affect local
...earch and extension, rural infrastructure, and market access for small farmers. Rural investments have been sorely neglected in recent decades, and now is the time to reverse this trend. Farmers in many developing countries are operating in an environment of inadequate infrastructure like roads, electricity, and communications; poor soils; lack of storage and processing capacity; and little or no access to agricultural technologies that could increase their profits and improve their livelihoods. Recent unrest over food prices in a number of countries may tempt policymakers to put the interests of urban consumers over those of rural people, including farmers, but this approach would be shortsighted and counterproductive. Given the scale of investment needed, aid donors should also expand development assistance to agriculture, rural services, and science and technology.
Agriculture is a tough field to enter. Farming is no ordinary profession, nor is it cheap. With farming, comes many risks - some even life threatening. As with any other profession, equipment is needed to perform the job effectively. In this field, the equipment is very costly. The prices of the equipment, chemicals, and seed are increasing whereas the prices of the crop are steady decreasing. How are farmers supposed to make a substantial income when the prices are overwhelming? Can the government not allow a set income for farmers each year, in addition to their profit?
The inevitable possibility of disasters and their outcomes of destruction leaves farmers at a risk of financial ruin. The 2014 Farm Bill in the United States was created to protect such agricultural producers, including livestock producers, from the devastation that can be caused to farms due to weather, disease from weather, or attacks by animals that were released or protected by the federal government. Provided by the University of Nebraska-Lincoln and the Institute of Agriculture and Natural Resources, the information can be trusted because it comes from a highly educated source that focuses on agriculture, and more specifically cattle by UNL Beef (“The 2014 Farm Bill...”). The source also explains how the bill provides protection, one way being through the Livestock Indemnity Program (LIP) for abnormal animal deaths, and another way being through the Livestock Forage Disaster Program (LFP) for losses in grazing lands. The LIP is managed by the federal operated Farm Service Agency (FSA) and economic assistance “is limited to a cumulative $125,000 per person per year across all programs” (“The 2014 Farm Bill…”). . The evidence from the 2014 Farm Bill verifies the importance and growth of animal agriculture in the economy because the 2014 Farm Bill and the LIP is a federally operated