This paper considers the use of indices built on the basis of remote-sensing data for crop 5 insurance purposes. In our analysis, we compare the capacity of two satellite-based vegetation 6 health (VH) indices, the vegetation condition index (VCI) and the temperature condition index 7 (TCI), measured for important periods of the crop vegetation to predict farmers' wheat yields in 8 two main grain producing regions of Kazakhstan. The selected indices are used for the design of 9 index-based insurance contracts. The dependence of wheat yields on vegetation conditions as measured by VCI and TCI, is modeled by applying the copula approach. Our empirical results for 47 grain-producing farms in the Northern Kazakhstan show that insurance contracts built on VH indices can provide substantial risk reductions for a group of farms, though on average for the whole sample, risk reductions were found to be moderate. The study results suggest that the effectiveness of insurance contracts can be improved using satellite data of higher resolutions and measuring indices at more disaggregated levels.
ABSTRACT:The article presents the evaluation of spatial-temporal characteristics of Kazakhstan arid and semi-arid areas' vegetation on the basis of time series of differential and integral vegetation indices. It is observed the negative trend of integral indices for the period of 2000-2015. This fact characterizes the increase of stress influence of weather conditions on vegetation in Kazakhstan territory during last decade. Simultaneously there is a positive trend of areas of zones with low values of IVCI index. Zoning of the territory of Kazakhstan was carried out according to the long-term values of the normalized integral vegetation index, which is characteristic of the accumulated amount of green season biomass. Negative trend is marked for areas of high productivity zones, long-term changes in the areas of low productivity zones have tend to increase. However long-term values of the area of the middle zone are insignificantly changed. Location boundaries of this zone in the latitudinal direction connects with a weather conditions of the year: all wet years, the average area is located between 46 0 -49 0 N, and the all dry years -between 47 0 30'-54 0 N. The map of frequency of droughts was formed by low values of the integral vegetation condition index which calculated from satellite data.
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