Hybrid Satellite Agriculture Drought Indices A multi criteria approach to improve crop insurance

Drought is a major devastating natural disaster as it continues to impact the ecosystems and livelihoods for considerable duration of time, sometime for years. While Governments, Insurers and Farmers have shown significant interest in Weather Index Insurance (WII), basis risk remains a key challenge for making it effective and scalable. Correlations between critical parameters and yield hold the key for the development of the market. Many developing countries lack the infrastructure or density of established weather stations for long term historical data. Instead of using only rainfall based index, an agro-meteorological drought index that takes into account rainfall as well as other parameters that impact crop growth should be considered. In presence of various other drought coping mechanisms implemented in drought hit regions, weather index insurance become further challenging and raises cases of adverse selection. Multi criteria decision involving spatially identifying irrigated and non-irrigated areas, drought resistant rice variety areas, and alternate dry and wet management areas would help insurance companies to select appropriate target markets for offering crop insurance products. Satellite derived index for monitoring vegetation like Normalized Differential Vegetation Index (NDVI) can be used to validate and if required inspect vegetation status prior to releasing claims. This would reduce the fear of farmers exploiting crop insurance. Incorporating Geo-spatial technologies and Hybrid Satellite Agriculture Drought Indices (HySADI), current weather index insurance processes can be improved.