Summary

Agriculture is an integral component in the economy of many countries worldwide.

The “liberalization” of international trade has heightened government interest in risk management strategies which promote local agriculture yet comply with global trade agreements. Crop insurance has a myriad of forms addressing a wide spectrum of agricultural risk management demands, from supporting governmental aid for regional disasters to stabilizing farm-level credit or revenue. Risk management in its most basic form may provide agricultural insurance that can be used to insure governments against regional crop failure. These governments can then use insurance proceeds to provide regional disaster aid packages (e.g., food and feed supply regional assistance). When sufficient individual data are available, sophisticated, individual, farm-level revenue insurance can provide a safety net for individual agricultural producers. A whole range of options between these approaches is appropriate for specific situations, but only if the insurance can be developed in an appropriate manner to address local circumstances and if the local infrastructure is developed.

Statement of Need

There are no institutions that offer more than a brief introduction to crop insurance and, when available, the treatment may not address agricultural examples nor focus on practical development and application of crop insurance programs.

Because of this, there is not a ready pool of people with a formal technical education in the nuances of crop insurance worldwide. Those administrators, bureaucrats, officers, and actuaries who deal with crop insurance have generally obtained the bulk of their knowledge of this unique insurance “on-the-job”. So within the industry, the pool of knowledgeable personnel is limited.

Structure of the Institute

The structure for the Institute has two main concept components: non-profit and virtual

The non-profit component is attractive from two perspectives. First, since this is an international institute, a non-profit entity may have more widespread acceptance with under-developed and developing countries. In these situations, governments may be instrumental in either guiding or supporting the notion of a crop insurance scheme to stabilize agriculture as part of a broader public policy. Technology transfer from an organization with no direct profit motive may appeal to these countries where financial resources are constrained. Similarly, donor agencies from developed countries providing assistance in support of agricultural initiatives in under-developed or developing countries may be more apt to utilize the services of a non-profit entity and/or subsidize the enrollment of participants to courses provided by a non-profit entity. The World Bank has traditionally been involved in securing funding from donor countries to support feasibility studies and the development and delivery of crop insurance and agricultural risk management schemes in under-developed and developing countries. While they contract with private sector consulting firms for specific tasks, the expected project scope is often at odds with the budgetary allotment to develop viable solutions. Providing technology transfer through an institute setting, where a number of countries can be involved simultaneously, would be efficient and, as a non-profit entity supported by the private sector, an attractive structure in a multi-donor agency environment.

Potential Client Base for the Institute

The Institute will generate interest from a wide variety of clients who wish to either take courses or sponsor the cost of course attendance for others.

  • Senior government officials, managers, and technical professionals from under-developed and developing countries.
  • Regional private sector insurance and reinsurance firms from under-developed and developing countries.
  • Senior government officials, managers, and technical professionals from developed countries with limited experience in crop and livestock insurance.
  • Senior government officials, managers, and technical professionals from countries with experience in crop insurance.
  • Global insurance and reinsurance firms not actively accepting agriculture risk.
  • Global insurance and reinsurance firms actively accepting agriculture risk.
  • Government regulators, actuarial firms, and loss adjusting firms.

Storage

Goals for the Institute

Developing Countries:
To develop sustainable agricultural risk management programs for developing countries that result in economic stability and new sources of “risk capital” for their agriculture sectors.

Developed Countries:
To provide a training, succession planning, and “analytical research capability” environment for developed country governments and private companies engaged or expanding their work in agricultural risk management.




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Web Site Last Updated
April 15, 2010