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Acta Prataculturae Sinica ›› 2021, Vol. 30 ›› Issue (8): 171-185.DOI: 10.11686/cyxb2020293

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Index insurances for grasslands: A review and the Chinese scheme design

Hui-long LIN1(), Yan-fei PU1, Dan-ni WANG1,2, Hai-li MA1   

  1. 1.State Key Laboratory of Grassland Agro-ecosystems,Key Laboratory of Grassland Livestock Industry Innovation,Ministry of Agriculture and Rural Affairs,College of Pastoral Agriculture Science and Technology,Lanzhou University,Lanzhou 730020,China
    2.College of Music,Hexi University,Zhangye 734000,China
  • Received:2020-06-24 Revised:2020-10-29 Online:2021-07-09 Published:2021-07-09
  • Contact: Hui-long LIN

Abstract:

Index insurances for grasslands (IIGs) are a new kind of agricultural insurance, whose claim trigger mechanism, including the index to be used when assessing claims and the threshold level for payment, is more scientific than that of traditional indemnity insurances. IIGs choose indices closely relevant to grassland production and study the relationships between yield, climate, NDVI and economic data to precisely calculate the claim trigger level of the selected index. Through this procedure, the local norm is identified and the claim trigger mechanism is used to decide whether the insured will receive a payout. We have explored the trigger mechanisms of 18 operational IIGs from 11 countries and grouped them into 3 types based on different categories of index selection. They are area-yield index insurance (AI), weather index insurance (WI) and satellite/remote-sensing index insurance (SRI). AI is based on the selected area’s average yield. When the actual average output of the area is lower than the specified level, all insured persons receive the same amount of compensation; WI choose climatic indicators (temperature, rainfall, etc.) as indices and measure the extent to which they limit grassland production; SRI is innovatively designed with satellites and remote-sensing, and NDVI is the most widely used index. However, even though China is a country with very large areas of grassland, China has little research into IIGs, and few products of this type under development or available to farmers. This situation is not conducive to the sustainable development of grassland. Considering the limited availability of relevant data in China and the vast area of grasslands, it is not advisable to simply adopt products from other countries. Therefore, there is an urgent need to develop a China-oriented scheme. This paper proposes a novel scheme based on the comprehensive and sequential classification system of grasslands (CSCS) using remote sensing data sources (providing macro data), drone technology (providing supplementary meso data), and economic data collected from grassland producers through household surveys of farmers and herdsmen(as micro data). Through systematic analysis of relationships between yield, climate, NDVI and economic data over a number of years, a grassland category’s expected productivity can be determined. This will then make possible the establishment of indemnity whenever the productive capacity or income of the insured falls below the designated threshold relative to a normal year.

Key words: grassland, index insurance for grasslands, area-yield index insurance, weather index insurance, satellite/remote-sensing index insurance