Can Technology and Insurance Prevent Agrarian Crises ?

Abstract

Climate change has exacerbated the risks to fragile ecosystems of farming communities and their livelihoods. A solution is sought in the form of crop insurance, particularly among agricultural producing nations. These initiatives have been publicly funded for many decades and gradually shifting to free market mechanisms. In the coming years, brisk changes are anticipated by the scientific community because of the convergence of advancements in remote sensing, big data and machine learning. With these technological advancements, we are able to objectively assess crop health almost instantly and at a large scale. Such large scale and quick estimates of crop conditions are equipping the insurance industry to not only settle the claims accurately and economically, but also to build robust actuarial risk models to set insurance premiums. With help from large scale open datasets that have arisen in the last decade, we offer a framework to protect farm incomes from climate related uncertainties. Such tech-enabled business processes can increase the acceptance of crop insurance, provided that algorithmic biases are addressed. It has become imperative to better understand the technology choices that can develop resilience in farming communities. To this effect, concerted efforts are necessary across the domains of actuarial modelling, agronomy, data science and remote sensing