Index Insurance, Production Practices, and Probabilistic Climate Forecasts

The failure of the development of commercially viable traditional crop insurance products and innovations in financial markers has fed a renewed interest in the search for alternatives to help producers in developing countries manage their risk exposure. Salient among these is the proposal of several index insurance schemes against weather events. Among the basic tenets are that the presence of index insurance allows producers to intensify their operations and reduce the risks of default and hence may induce creditors to offer loans at affordable rates. The two factors combined are touted as key to help producers in developing countries escape poverty traps. Improvements in seasonal climate forecasts create challenges for the design and effective functioning of the insurance against climate risks. However, very little is known about potential synergies or conflicting impacts of these two institutions, and the interactions between them and input management decisions by producers. We find that insurance and forecast may have synergistic or conflicting effects on input decisions. In the presence of (state contingent) actuarially fair insurance, producers may prefer the forecast information not to be available, especially if the management options available do not result in sufficient changes in profitability. Perhaps surprisingly, we find that forecast information may induce producers to increase the amount of insurance purchased.Climate forecast, Index insurance, Input Decisions, Risk Management, Weather risks, Risk and Uncertainty,

Global Biofuel Expansion and the Demand for Brazilian Land: Intensification versus Expansion

We use a spatially disaggregated model of Brazilian agriculture to assess the implications of global biofuel expansion on Brazilian land usage at the regional level. This Brazilian model is part of the FAPRI agricultural modeling system, a multimarket, multi-commodity international agricultural model, used to quantify the emergence of biofuels and to analyze the impact of biofuel expansion and policies on both Brazilian and world agriculture. We evaluate two scenarios in which we introduce a 25% exogenous increase in the global demand for ethanol and one scenario in which we increase global ethanol demand by 50%. We then analyze the impact of these increases in terms of land-use change and commodity price changes particularly in Brazil. In the first scenario, we assume that the enforcement of the land-use reserve in Brazil remains at historically observed levels, and that abundant additional land can be readily incorporated into production. The second scenario involves implementing the same exogenous biofuel demand shock but with a different responsiveness in area expansion to price signals in Brazil, reflecting varying plausible assumptions on land availability for agricultural expansion. The third scenario, which is similar to the first scenario but with a larger increase in global ethanol demand, is run to check whether increasing volume of ethanol requires the incorporation of additional quantities of land per unit of ethanol. We find that, within Brazil, the expansion occurs mostly in the Southeast region. Additionally, total sugarcane area expansion in Brazil is higher than the increase in overall area used for agriculture. This implies that part of the sugarcane expansion displaced other crops and pasture that is not replaced, which suggests some intensification in land use. The lower land expansion elasticities in the second scenario result in a smaller expansion of area used for agricultural activities. A higher proportion of the expansion in sugarcane area occurs at the expense of pasture area, which implied land intensification of beef production. This explains the small change in commodity prices observed between the first and second scenarios. These results suggest that reducing the overall responsiveness of Brazilian agriculture may limit the land-use changes brought about by biofuel expansion, which would in turn reduce its environmental impacts in terms of land expansion. Additionally, the impacts on food prices are limited because of the ability of local producers to increase the intensity of land use in both crop (by double cropping and raising yields) and livestock production (by increasing the number of heads of cattle per hectare of pasture or stocking rate) releases area that can be used for crops. In scenario three, we find that larger ethanol volumes did not require more land per unit of ethanol. Doubling the demand for ethanol does not change the results, which indicates that the limit for intensification is beyond the 50% expansion assumed in Scenario 3. In this range, the same amount of land is incorporated into production per additional unit of ethanol.Biofuels, Brazil, land use, Land Economics/Use,

Designing Weather Insurance Contracts for Farmers in Malawi, Tanzania and Kenya: Final Report to the Commodity Risk Management Group, ARD, World Bank

This report presents project products to the Commodity Risk Management Group of the World Bank for the development and evaluation of index insurance contracts for smallholder farmers in Malawi, Tanzania, and Kenya. The development of some products we are providing was supported at no cost by the NSF-funded Center for Research on Environmental Decisions. Index insurance is a relatively new weather risk management tool. While traditional insurance insures against crop failure, index insurance insures for a specific event or risk, such as rainfall deficits. The index insurance can be more cost effective since there is no need for in-field assessment of damage because payouts are triggered by weather data directly. Index insurance addresses two problems associated with traditional crop insurance: moral hazard (incentives for a farmer to let a crop die in order to get an insurance payout) and adverse selection (in which insurance is priced based on the risks of the entire population but only the most vulnerable farmers purchase insurance). However, index insurance only provides partial protection and is therefore only one part of a complete risk management package. It is critical that the client have a comprehensive understanding of exactly what risks are covered (and what risks are not covered) by the index product so that clients can effectively use the insurance as a part of their risk management system. Products must be transparent and completely understandable to the client or they will not be able to play their proper role

Biofuel Expansion, Fertilizer Use, and GHG Emissions: Unintended Consequences of Mitigation Policies

Increased biofuel production has been associated with direct and indirect land-use change, changes in land management practices, and increased application of fertilizers and pesticides. This has resulted in negative environmental consequences in terms of increased carbon emissions, water quality, pollution, and sediment loads, which may offset the pursued environmental benefits of biofuels. This study analyzes two distinct policies aimed at mitigating the negative environmental impacts of increased agricultural production due to biofuel expansion. The first scenario is a fertilizer tax, which results in an increase in the US nitrogen fertilizer price, and the second is a policy-driven reversion of US cropland into forestland (afforestation). Results show that taxing fertilizer reduces US production of nitrogen-intensive crops, but this is partially offset by higher fertilizer use in other countries responding to higher crop prices. In the afforestation scenario, crop production shifts from high-yielding land in the United States to low-yielding land in the rest of the world. Important policy implications are that domestic policy changes implemented by a large producer like the United States can have fairly significant impacts on the aggregate world commodity markets. Also, the law of unintended consequences results in an inadvertent increase in global greenhouse gas emissions

Variación espacio-temporal de la cobertura de coral del norte del Sistema Arrecifal Mesoamericano, Península de Yucatán, México

Evaluating the response of coral assemblages to different disturbances is important because variations in species composition may have consequences for ecosystem functioning due to their different functional roles in coral reefs. This study evaluates changes in diversity, structure and composition of coral assemblages of the coral reefs of two national parks in the northern sector of the Mesoamerican Barrier Reef System spanning the period from 2006 to 2012, just after the impact of two hurricanes in the area. Coral assemblages in the Cancún National Park included fewer species and lower live coral coverage ( < 15%) than those recorded in Cozumel. In the Cancún National Park, the species with the highest coral cover was Porites astreoides (more than 40% relative cover), and no significant temporal changes were observed in live coral cover and species composition. On the other hand, in the Cozumel National Park the dominant species were Agaricia agaricites, Siderastrea siderea and Porites astreoides, and the coral reefs showed an increase in live coral cover from 16% in 2006 to 29% in 2012. The dynamics of coral assemblages differed between the two parks: while there is an apparent stability in the current composition of the Cancún reefs, the Cozumel reefs show an increase in the abundance of the aforementioned dominant species. However, it is possible that the population characteristics of the species that dominate the coral assemblages in both national parks, such as those of fast population growth and of small colony size, do not entirely fulfill the main function of accretion and habitat heterogeneity, and more research is therefore needed to test this hypothesis.Evaluar la respuesta de las comunidades de coral a diferentes perturbaciones es importante ya que las variaciones en la composición de las especies pueden tener consecuencias en el funcionamiento del ecosistema, debido a los diferentes roles funcionales que cada especie tiene dentro de él. En este estudio se evaluaron los cambios en la diversidad, estructura y composición de las comunidades en los arrecifes de dos Parques Nacionales ubicados en el sector norte del Sistema Arrecifal Mesoamericano, durante el periodo 2006-2012, justo después del impacto de dos huracanes en la zona. En el Parque Nacional Cancún se registraron pocas especies de coral y una cobertura de coral vivo baja ( < 15%) sin cambios temporales significativos; la especie más dominante en este parque fue Porites astreoides con más del 40% de cobertura relativa. Por otro lado, los arrecifes de coral del Parque Nacional de Cozumel mostraron un incremento en la cobertura de coral del 16% en 2006 a 29% en 2012; las especies dominantes, y que incrementaron su cobertura en este periodo, fueron Agaricia agaricites, Siderastrea siderea y P. astreoides. Aunque la dinámica de las comunidades de coral fue diferente en ambos parques, es posible que las características poblacionales de las especies que dominan las comunidades de coral en todos los arrecifes no cumplan por completo con las funciones principales de acreción y heterogeneidad de hábitat; sin embargo se necesita más investigación para poder evaluar esta hipótesis

Sodium and potassium intakes among US adults: NHANES 2003–2008

Background: The American Heart Association (AHA), Institute of Medicine (IOM), and US Departments of Health and Human Services and Agriculture (USDA) Dietary Guidelines for Americans all recommend that Americans limit sodium intake and choose foods that contain potassium to decrease the risk of hypertension and other adverse health outcomes. Objective: We estimated the distributions of usual daily sodium and potassium intakes by sociodemographic and health characteristics relative to current recommendations. Design: We used 24-h dietary recalls and other data from 12,581 adults aged $20 y who participated in NHANES in 2003–2008. Estimates of sodium and potassium intakes were adjusted for withinindividual day-to-day variation by using measurement error models. SEs and 95$51 y or persons with hypertension, diabetes, or chronic kidney disease), 98.8% (98.4%, 99.2%) overall consumed .1500 mg/d, and 60.4% consumed .3000 mg/d—more than double the recommendation. Overall, ,2% of US adults and w5% of US men consumed $4700 mg K/d (ie, met recommendations for potassium). Conclusion: Regardless of recommendations or sociodemographic or health characteristics, the vast majority of US adults consume too much sodium and too little potassium

Confirmation of beach accretion by grain-size trend analysis: Camposoto beach, Cádiz, SW Spain

An application of the grain size trend analysis (GSTA) is used in an exploratory approach to characterize sediment transport on Camposoto beach (Cádiz, SW Spain). In May 2009 the mesotidal beach showed a well-developed swash bar on the upper foreshore, which was associated with fair-weather conditions prevailing just before and during the field survey. The results were tested by means of an autocorrelation statistical test (index I of Moran). Two sedimentological trends were recognized, i.e. development towards finer, better sorted and more negatively skewed sediment (FB–), and towards finer, better sorted and less negatively or more positively skewed sediment (FB+). Both vector fields were compared with results obtained from more classical approaches (sand tracers, microtopography and current measurements). This revealed that both trends can be considered as realistic, the FB+ trend being identified for the first time in a beach environment. The data demonstrate that, on the well-developed swash bar, sediment transported onshore becomes both finer and better sorted towards the coast. On the lower foreshore, which exhibits a steeper slope produced by breaking waves, the higherenergy processes winnow out finer particles and thereby produce negatively skewed grain-size distributions. The upper foreshore, which has a flatter and smoother slope, is controlled by lower-energy swash-backwash and overwash processes. As a result, the skewness of the grain-size distributions evolves towards less negative or more positive values. The skewness parameter appears to be distributed as a function of the beach slope and, thus, reflects variations in hydrodynamic energy. This has novel implications for coastal management