UC Davis Agricultural and Resource Economics

Professor Michael Carter's Research in Western Africa: Index Insurance Provides Security and Promotes Development for Small-Scale Cotton Farmers and Local Economies

June 25, 2018

ARE Professor Michael Carter's research in Western Africa demonstrates how index insurance could promote resilience among cotton farmers at risk of drought.

Agricultural index insurance protects small-scale farmers in developing countries who face a persistent threat of weather-related catastrophes. In the event of losses, the low-cost insurance provides a safety net. And, as illustrated in this study, when farmers know they are protected, they tend to invest more in hopes of higher income in good years, which promotes economic development. "This suggests that if you provide a better instrument to manage risk, $48 can generate $300," Carter said.

Click here to read about the research study of cotton farmers in Burkina Faso and Mali, Africa.


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