Assessing Crop Yield and Risk: A New Method for Calculating Insurance Based on Rainfall

Fabian Capitanio; Azzam Hannoon; Jeffrey Darville; Alessio Faccia

doi:10.1007/978-3-030-32922-8_5

Assessing Crop Yield and Risk: A New Method for Calculating Insurance Based on Rainfall

Fabian Capitanio
, Azzam Hannoon
, Jeffrey Darville
, Alessio Faccia

Federico II University
American University in the Emirates

Research output: Chapter in Book/Report/Conference proceeding › Chapter › peer-review

Abstract

The aim of this paper is to explore a new method for data analysis that could be used for insurance calculations. In many agricultural nations rainfall per year and per annual quarter are good indications of the productive capacity in farmland. Essentially, there is a curvilinear relationship between rain and crop yield. The goldilocks zone varies by region and product, however, every farmer and minister of agriculture fears drought and/or flood. A Copula Quantile Regression (CQR) approach provides a novel approach to estimate the dependence of a function of the yield with respect to climate factors. This is then combined with quantile regression for nonlinear optics. This approach utilizes “Big Data” modeling and analytics to draw upon the wealth of information contained in the RICA databases. This study assesses variables such as the share of land covered by a sprinkler system, altitude, fragmentation of land, production intensity, rain, and temperature. It was found that this method provides a simpler and more flexible approach to analyze complex ecological, geological, economic, and sociological factors that impact business and commerce through risk management, strategic planning, and insurance.

Original language	English
Title of host publication	Advances in Science, Technology and Innovation
Editors	Miroslav Mateev, Jennifer Nightingale
Publisher	Springer Nature
Pages	43-60
Number of pages	18
ISBN (Electronic)	978-3-030-32922-8
ISBN (Print)	978-3-030-32921-1
DOIs	https://doi.org/10.1007/978-3-030-32922-8_5
Publication status	E-pub ahead of print - 12 Feb 2020
Externally published	Yes

Publication series

Name	Advances in Science, Technology and Innovation
ISSN (Print)	2522-8714
ISSN (Electronic)	2522-8722

Funding

The passive preventive hedging tools (insurance) are the focus of this research. An insurance contract is a tool through which the company transfers its risk to third parties (insurance company). The company that underwrites an insurance contract effectively transfers to third parties (insurance company) the business risk or part of it, which in this case is represented exclusively by potential damage due to adverse weather or epizootics. At the same time, the insurance company is obliged, in respect of the insured, to compensate the company if an accident occurs according to the contract conditions. For the transfer of risk the agricultural company must bear a cost (insurance premium), for which it can receive partial financial support from the European Union or the State. The agricultural enterprise, which intends to sign an insurance contract, has two possibilities: adherence to a collective contract or the signing of an individual insurance contract.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 7 Affordable and Clean Energy
SDG 13 Climate Action
SDG 15 Life on Land

Keywords

Agriculture
Climate factors
Crop yield and risk insurance
Risk management
Strategic planning

ASJC Scopus subject areas

Architecture
Renewable Energy, Sustainability and the Environment
Environmental Chemistry

Access to Document

10.1007/978-3-030-32922-8_5

Cite this

Capitanio, F., Hannoon, A., Darville, J., & Faccia, A. (2020). Assessing Crop Yield and Risk: A New Method for Calculating Insurance Based on Rainfall. In M. Mateev, & J. Nightingale (Eds.), Advances in Science, Technology and Innovation (pp. 43-60). (Advances in Science, Technology and Innovation). Springer Nature. Advance online publication. https://doi.org/10.1007/978-3-030-32922-8_5

Assessing Crop Yield and Risk: A New Method for Calculating Insurance Based on Rainfall. / Capitanio, Fabian; Hannoon, Azzam; Darville, Jeffrey et al.
Advances in Science, Technology and Innovation. ed. / Miroslav Mateev; Jennifer Nightingale. Springer Nature, 2020. p. 43-60 (Advances in Science, Technology and Innovation).

Research output: Chapter in Book/Report/Conference proceeding › Chapter › peer-review

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Assessing Crop Yield and Risk: A New Method for Calculating Insurance Based on Rainfall

Abstract

Publication series

Funding

UN SDGs

Keywords

ASJC Scopus subject areas

Access to Document

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Cite this