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WRMAs Annual Meeting Toulouse October
2006 Agriculture and Weather Cover
Jean-Christophe Garaix
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Agriculture and weather cover
Weather cover a solution for agriculture
TABLE
For Developing countries looking for funding
solutions Ex Ethiopian Structure For farmers
in developing countries looking for sophisticated
solutions Ex the yield cover
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Weather cover for developing countries
Weather derivative/insurance is a new instrument
used in developing countries to Protect small
farmers against drought Finance emergency aid
for non governmental or governmental institutions
in case of drought, flood. To provide insurance
to populations that cant access to it Create a
loan offer from banks for the farmers
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New players and stakeholders
Involvement of the World Bank since 2001 (CRMG
team) on pilot projects design and implementation
Involvement of non governmental organization to
finance emergency aid (ex WFP) Involvement of
different donors in financing project development
costs Involvement of local government and states
to protect their population and farmers
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Different needs
Two types of approaches Macro with government or
international organizations as counterparts
gt The final beneficiary is not linked with the
weather pay off formula Micro with local insurers
or financial institutions as distributor gt
The final beneficiary is linked with the weather
pay off formula (insurance contract)
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Specific issues with developing countries
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Specific issues with developing countries
Greater diversification No hedging available
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Some successful projects

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Ethiopian Structure
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Ethiopian Structure

• Location
• 26 Weather Stations
• (Agricultural Areas Only)
• Start Date
• 11th March 2006
• End Date
• 31st October 2006

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Ethiopian Structure
Ethiopia drought Index value
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Developing countries solution Yield Model
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Developing countries solution Yield Model
The Index is based on the county/region wide
grain yield reported by the Agricultural
Ministry/Department
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Developing countries solution Yield Model
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Developing countries solution Yield Model
The Index meets the farmers needs much better
than a purely weather based index
The Index does not cover a bad yield due to -gt
Moral hazard, bad management from the farmer -gt
Other natural or non-natural perils disease,
bush fire, windstorm, flood, pollution,
insufficient pollenisation, etc
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A dedicated team at your entire disposal
E-mail jeanchristophe.garaix_at_axa-re.com Tel
(33) 1 56 43 90 19 Fax [phone]