Baumgärtner, S.

Frank, K.

Müller, Birgit

Quaas, M.

English

University of Kentucky

University of Kentucky UKnowledge International Grassland Congress Proceedings XXI International Grassland Congress / VIII International Rangeland Congress Pitfalls of Institutional Change: Rain‐Index Insurance May Impair the Sustainability of Rangeland Management Birgit Müller Helmholtz Centre for Environmental Research, Germany M. Quaas Christian‐Albrechts‐University of Kiel, Germany K. Frank Helmholtz Centre for Environmental Research, Germany S. Baumgärtner Leuphana University of Lüneburg, Germany Follow this and additional works at: https://uknowledge.uky.edu/igc  Part of the Plant Sciences Commons, and the Soil Science Commons This document is available at https://uknowledge.uky.edu/igc/21/18-1/24 The XXI International Grassland Congress / VIII International Rangeland Congress took place in Hohhot, China from June 29 through July 5, 2008. Proceedings edited by Organizing Committee of 2008 IGC/IRC Conference Published by Guangdong People's Publishing House This Event is brought to you for free and open access by the Plant and Soil Sciences at UKnowledge. It has been accepted for inclusion in International Grassland Congress Proceedings by an authorized administrator of UKnowledge. For more information, please contact UKnowledge@lsv.uky.edu. 瞯 ]920　 瞯 　 Multifunctional Grasslands in a Changing World 　 Volume Ⅱ 　Grasslands/Rangelands People and Policies——— Policy Issues for Grasslands/RangelandsPitfalls of institutional change : rain‐index insurance may impair the sustainability of rangelandmanagementB . Müller 1 , M . Quaas 2 , K . Frank1 , S . Baumg惫rtner 31 Department o f Ecological Modelling , Helmholtz Centre f or Env ironmental Research‐UFZ , Permoserstr . 15 , 04318Leip z ig , Germany , E‐mail : birgit .mueller＠ u f z .de , 2 Department o f Economics , Christian‐A lbrechts‐University o f K iel ,Olshausenstr .40 , 24118 K iel , Germany , 3 Centre f or Sustainability Management , Leuphana University o f Lüneburg , P .O .Box 2440 , 21314 Lüneburg , GermanyKey words : ecological‐economic modelling , livestock grazing , resting strategy , risk management , semi‐aridIntroduction In the context of global change , recently new institutions become available for farmers worldwide to hedge incomerisk . These institutions are especially important in ( semi‐) arid regions where the livelihood of the majority of people depends onlivestock farming . At these rangelands the highly variable and uncertain precipitation translates into a highly uncertain income .A second challenge for range management is that inappropriate grazing strategies can lead to land degradation , i .e . loss ofpasture productivity .In this study one particular institution‐rain‐index insurance‐is under focus . This type of insurance provides an indemnitypayment to the farmer if rainfall does not reach a prior defined strike level . The aim of the presented research is to investigatethe implications of introducing such rain‐index insurances on strategy choice of the farmer and therewith on the long‐termdynamics of the overall system .Materials and methods The starting point for the analysis of different grazing strategies is the case study of a farm in Namibia ,which is successful in ecological and economic terms (Müller et al . ２００７ , Quaas et al . ２００７) . The key element of the grazingstrategy is resting of a part of the pasture in rainy years . Using an ecological‐economic simulation model , the farmer摧s incomerisk with and without insurance for different grazing strategies is compared . Furthermore long‐term impacts on rangelandcondition are investigated for different scenarios .Results and discussion The results reveal strong feedback mechanisms between the ecological and socioeconomic subsystem . Tworesults are emphasized here . Firstly , resting pastures during rainy years helps to build up an intrinsic buffer of the system‐thereserve biomass ( describing non‐photosynthetic reserve organs below and above ground of the plant ) . Such grazing strategyleads to a reduction of income risk . Apart from this short‐term insurance effect , resting pastures in rainy years enables thefarmer to maintain high pasture productivity in the long term . Hence it serves as investment in the future . However , access toan economic buffer i .e . to the financial institution rain‐index insurance , can create adverse effects : Farmer may change to lesssustainable strategies . The study shows that these findings strongly depend on the design of the insurance contract , and inparticular on the strike level .Conclusions These results have far‐reaching implications for policy makers . It is revealed that in order to design suitable riskmanagement measures , the structure of the social‐ecological system , and in particular intrinsic buffer mechanisms , have to betaken into account . Policy makers should be aware of the influence that these economic risk management measures could haveon farmer摧s choice of grazing strategies . Otherwise these measures may have detrimental effects on the resilience of therangeland ecosystem and , therewith , on the long‐term well‐being of farmers .ReferencesMüller ,B . ,Frank ,K . ,Wissel ,C . ,２００７ . Relevance of rest periods in non‐equilibrium rangeland systems‐a modellinganalysis . A gricultural Systems ９２ : ２９５‐３１７ .Quaas , M . F . , S . Baumg惫rtner ,C . Becker ,K . Frank ,B . Müller ,２００７ . Uncertainty and sustainability in the managementof rangelands , Ecological Economics ６２ : ２５１‐２６６ .

Pitfalls of Institutional Change: Rain‐Index Insurance May Impair the Sustainability of Rangeland Management

https://uknowledge.uky.edu/cgi/viewcontent.cgi?article=3803&context=igc

Pitfalls of Institutional Change: Rain‐Index Insurance May Impair the Sustainability of Rangeland Management

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