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Month: December 2012

Sounds About Right (Food Policy Content)

There is nothing more basic than food. Food is the biggest of the essentials of life, our biggest industry, our most frequently indulged pleasure, and perhaps the greatest cause of disease and death. Despite its importance, food is often taken for granted, especially by academics, who have long considered food matters to be too coarse for scholarly attention.

From Warren Belasco’s introduction to his book Food: The Key Concepts, which I will be using as one of the core readings in the food policy course I am teaching next semester. The emphasis is mine.

Managing Basis Risk with Index Insurance in West Africa

Exposure to risk is one of life’s few certitudes. For people who live in developing countries, where underdevelopment almost always extends to financial markets, and where financial instruments to hedge against risk are fewer and further between than in industrialized countries, risk is even more prevalent. The rise of microfinance over the last 20 years has brought about the development of financial instruments designed to protect the poor against some of the risk they face. We first develop an innovative index insurance contract for West African cotton producers, whose harvests are highly variable. The main feature of this contract is that relative to commonly used index insurance contracts, it considerably reduces the basis risk faced by West African cotton producers. We then describe an ongoing evaluation of the impacts of the double-trigger insurance contract in Mali and Burkina Faso.