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Rainfall index-based insurance for maize farmers in Thailand : review of pilot program 2006-2008 (English)

Agriculture remains a major economic activity in Thailand despite the growth of industrial and service sectors in the past decades. Agriculture accounts for 10 percent of Thailand's Gross Domestic Product (GDP) but supports directly and indirectly the majority (68 percent) of the Thai population who live in rural areas. Exposure to natural disasters causes significant financial losses to Thailand's agricultural sector each year, with droughts and floods being the most recurrent shocks. At the micro?level, these extreme weather events negatively impact farmers' livelihoods, resulting in significant income losses, an inability to repay loans, and, ultimately, poverty. At the national level, the government absorbs the costs of these natural disasters through various spending channels including public relief operations funded by the Ministry of Finance (MOF), and a natural disaster compensation scheme funded by the Ministry of Agriculture and Agricultural Cooperatives (MOAC). In this context, the Commodity Risk Management Group (CRMG) of the World Bank's Agricultural and Rural Development (ARD) department began to provide technical assistance to Thai institutions to develop an index?based weather insurance pilot. The primary focus of the CRMG's technical assistance was on contract design for risks related to rainfall, while the local partners led and financed other aspects of the pilot program development. The World Bank also provided advice on administrative procedures, pilot program monitoring, and international experiences.

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Rainfall index-based insurance for maize farmers in Thailand : review of pilot program 2006-2008 (English). Experiential briefing note Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/486101468312352024/Rainfall-index-based-insurance-for-maize-farmers-in-Thailand-review-of-pilot-program-2006-2008