Finance, Agronomy and Food Security:Bundling Drought Tolerant Crops

Seasonal weather fluctuations directly and dramatically shape food security in developing countries. In many contexts, drought presents a major weather risk, and drought tolerant crop varieties have thus attracted widespread attention. But long-term farm and community security require protecting farms from the financial shocks of drought no matter what crop is used. Index insurance has garnered enthusiasm as an instrument for reducing producers’ vulnerability to weather. This presentation argues that in many rain-fed agricultural settings neither agronomic innovation in drought tolerance nor financial innovation in index insurance is sufficient in isolation to provide protection for farmers. The true potential for achieving enduring security might only be tapped when technical innovation in crops is bundled with Index Insurance. In many settings, such an innovation bundle may improve small farm viability and rural community vitality.