Agricultural Risk Modeling Challenges in China: Probabilistic Modeling of Rice Losses in Hunan Province

Abstract

This article summarizes a joint research project undertaken under the Risk Management Solutions, Inc. (RMS) banner to investigate some of the possible approaches for agricultural risk modeling in China. Two modeling approaches were investigated-the simulated weather crop index and the burn yield analysis approach. The study was limited to Hunan Province and a single crop-rice. Both modeling approaches were dealt with probabilistically and were able to produce probabilistic risk metrics. Illustrative model outputs are also presented. The article discusses the robustness of the modeling approaches and their dependence on the availability, access to, and quality of weather and yield data. We offer our perspective on the requirements for models and platforms for agricultural risk quantification in China in order to respond to the needs of all stakeholders in agricultural risk transfer. Keywords Agricultural risk insurance Á Agricultural risk modeling Á Burn yield analysis Á Catastrophe risk Á China Á Simulated weather crop index

Impacts and Risk Assessments of Climate Change for the Yields of the Major Grain Crops in China, Japan, and Korea

“…There are two main types of risk assessment methodologies for emergent hazard generation. One is to consider risk as a function of the danger of climate hazards, as well as the vulnerability and exposure of the crops [ 4 , 8 , 9 ]; the other one is to model yields or losses using a probability distribution [ 6 , 10 , 11 , 12 , 13 ]. The assessment methods based on hazards, vulnerability, and exposure are based on the connotation of risk in the construction of indicator systems and assessment models [ 14 , 15 ].…”

“…The exceedance probability refers to the probability that the yield reduction (loss) exceeds a certain threshold. Stojanovski et al simulated the weather crop index (WCI) and used burn yield analysis to calculate the distribution of the rice yield loss in Hunan Province, and they obtained an aggregate exceeding probability function (AEP) curve [ 12 ]. Based on grain yield data, the method of probability statistics is used in the above research to evaluate the risk to the grain yield.…”

Contrasting Influences of Seasonal and Intra-Seasonal Hydroclimatic Variabilities on the Irrigated Rice Paddies of Northern Peninsular Malaysia for Weather Index Insurance Design

“…Tremendous efforts in the development and implementation of weather index insurance have been made in the agricultural areas of Africa, Latin America, and some parts of Asia, especially as a mechanism of risk transfer [13,25,26]. However, the variabilities of hydroclimatic variables that influence local crop production pose challenges in minimising the basis risk, i.e., the risk of no payment incurred when there is an actual loss in yield, and, conversely, of payment incurred when there is no actual loss [27].…”