Effect of index-based livestock insurance on herd offtake: Evidence from the Borena zone of southern Ethiopia

Gebrekidan, Tnsue; Guo, Yixin; Bi, Sheng; Wang, Jing; Zhang, Chi; Wang, Jimin; Lyu, Kaiyu

doi:10.1016/j.crm.2018.10.003

Cited by 21 publications

(15 citation statements)

References 15 publications

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“…Similarly, other studies also reported a positive correlation between herd size and household's willingness to pay for index-based livestock insurance (IBLI) in Ethiopia [5] and Namibia [32]. Another advantage of LHI in this regard is its potential to reasonably decline distressful herd off-take before or after catastrophic risk which could help to maintain both a household's economic growth and the grassland ecosystem health [8,18]. However, it is worth noting that sustainable grazing is a function of grassland sensitivity to defoliation by grazing animals [18].…”

Section: Discussionmentioning

confidence: 90%

“…Livestock farming is highly sensitive to the vagaries of climate change (e.g., drought) that affects the pasture, livestock health, water resources, biodiversity, and the livelihood of herders that is hinged on the natural resources [2,3]. When natural pastures decline owing to climatic change or variability and in the absence of modern-risk coping measures [4], the foremost traditional approach of managing such risk by herding households include storage of forage and water for future use [5], creation of dry and wet season grazing areas, and splitting of the herd for easy management [6][7][8]. However, these traditional methods of risk management are less efficient due to the co-variability of weather-related challenges faced by herding households [9,10].…”

Section: Introductionmentioning

confidence: 99%

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Willingness to Pay for Livestock Husbandry Insurance: An Empirical Analysis of Grassland Farms in Inner Mongolia, China

Dong

Jimoh²,

Hou

et al. 2020

Sustainability

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Livestock husbandry insurance (LHI) is increasingly gaining acceptance in developing countries, relative to its efficacy in mitigating the covariate risks faced by households in vulnerable agrarian communities. However, this risk-mitigating tool has received little research attention in the context of Chinese herders. The current study focused on the status, and determinants of herders’ willingness to purchase LHI. We used a contingent valuation approach to collect data from 450 households across three grassland types in Inner Mongolia. Descriptive statistics and binary logistic regression models were used to analyze the collected data. We show that herders’ level of awareness and acceptance of LHI are below expectations. Our results further indicated that herders with higher education level, livestock number, risk perception level, awareness, and contracted grassland area are more likely to purchase LHI. Policymakers and insurers should design programs that will educate herders on LHI while taking cognizance of other critical factors that influence households to purchase insurance. This will go a long way in scaling-up the attractiveness of LHI to herders and the agrarian community at large.

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Section: Discussionmentioning

confidence: 90%

Section: Introductionmentioning

confidence: 99%

Willingness to Pay for Livestock Husbandry Insurance: An Empirical Analysis of Grassland Farms in Inner Mongolia, China

Dong

Jimoh²,

Hou

et al. 2020

Sustainability

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show abstract

“…It pays out, based on an index such as the HS index, calculated by meteorological data from a local weather station, rather than based on a consequence of weather, such as a reduction of the average daily gain or the mortality of the livestock. Most of the weather index-based insurances are configured to the grassland keeping of animals and the impact of the availability of feed, mostly for extensive livestock production in India [72], Iran [73,74], Ethiopia [75,76], South Africa [77] and for tropical areas [78].…”

Section: Discussionmentioning

confidence: 99%

Economic Risk Assessment by Weather-Related Heat Stress Indices for Confined Livestock Buildings: A Case Study for Fattening Pigs in Central Europe

et al. 2021

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In the last decades, farm animals kept in confined and mechanically ventilated livestock buildings have been increasingly confronted with heat stress (HS) due to global warming. These adverse conditions cause a depression of animal health and welfare and a reduction of the performance up to an increase in mortality. To facilitate sound management decisions, livestock farmers need relevant arguments, which quantify the expected economic risk and the corresponding uncertainty. The economic risk was determined for the pig fattening sector based on the probability of HS and the calculated decrease in gross margin. The model calculation for confined livestock buildings showed that HS indices calculated by easily available meteorological parameters can be used for assessment quantification of indoor HS, which has been difficult to determine. These weather-related HS indices can be applied not only for an economic risk assessment but also for weather-index based insurance for livestock farms. Based on the temporal trend between 1981 and 2017, a simple model was derived to assess the likelihood of HS for 2020 and 2030. Due to global warming, the return period for a 90-percentile HS index is reduced from 10 years in 2020 to 3–4 years in 2030. The economic impact of HS on livestock farms was calculated by the relationship between an HS index based on the temperature-humidity index (THI) and the reduction of gross margin. From the likelihood of HS and this economic impact function, the probability of the economic risk was determined. The reduction of the gross margin for a 10-year return period was determined for 1980 with 0.27 € per year per animal place and increased by 20-fold to 5.13 € per year per animal place in 2030.

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“…It pays out, based on an index, such as the HS index, calculated by meteorological data from a local weather station, rather than based on a consequence of weather, such as a reduction of the average daily gain or the mortality of the livestock. Most of the weather-index based insurances are configurated to the grassland keeping of animals, the impact of the availability of feed, mostly for extensive livestock production in India [68], Iran [69,70], Ethiopia [71,72], South Africa [73], and for tropical areas [74].…”

Section: Discussionmentioning

confidence: 99%

Economic Risk Assessment by Weather-Related Heat Stress Indices for Confined Livestock Buildings: A Case Study for Fattening Pigs in Central Europe

Schauberger¹,

Schönhart²,

Zollitsch³

et al. 2020

Preprint

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In the last decades farm animals kept in confined and mechanically ventilated livestock buildings are increasingly confronted with heat stress (HS) due to global warming. These adverse conditions cause a depression of animal health and welfare and a reduction of the performance up to an increase of the mortality. To facilitate sound management decisions, livestock farmers need relevant arguments, which quantify the expected economic risk and the corresponding uncertainty. The economic risk was determined for the pig fattening sector based on the probability of HS and the calculated decrease in the gross margin. The model calculation for confined livestock buildings showed, that HS indices calculated by easily available meteorological parameters can be used for assessment quantification of indoor HS, which is so far difficult to determine. These weather-related HS indices can be applied not only for an economic risk assessment but also for a weather-index based insurance for livestock farms. Based on the temporal trend between 1981 and 2017, a simple model was derived to assess the likelihood of HS for 2020 and 2030. Due to global warming, the return period for a 90-percentile HS index is reduced from 10 years in 2020 to 3-4 years in 2030. The economic impact of HS on livestock farms was calculated by the relationship between an HS index based on the temperature-humidity index (THI) and the reduction of the gross margin. From the likelihood of the HS and this economic impact function, the probability of the economic risk could be determined. The reduction of the gross margin for a 10 year return period was determined for 1980 with 0.27 € per year and animal place and increased by the 20-fold to 5.13 € per year and animal place in 2030.

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Effect of index-based livestock insurance on herd offtake: Evidence from the Borena zone of southern Ethiopia

Cited by 21 publications

References 15 publications

Willingness to Pay for Livestock Husbandry Insurance: An Empirical Analysis of Grassland Farms in Inner Mongolia, China

Willingness to Pay for Livestock Husbandry Insurance: An Empirical Analysis of Grassland Farms in Inner Mongolia, China

Economic Risk Assessment by Weather-Related Heat Stress Indices for Confined Livestock Buildings: A Case Study for Fattening Pigs in Central Europe

Economic Risk Assessment by Weather-Related Heat Stress Indices for Confined Livestock Buildings: A Case Study for Fattening Pigs in Central Europe

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