Track: Graduate Student Paper Competition

Abstract

Climate change is a phenomenon that occurs continuously and is sensitive to the agricultural sector. Future projections show that farmers will face several conditions, including warmer environments, uncertain rainfall patterns, and other extreme events. One of the adaptations to climate change in the agricultural sector is through Crop Insurance based on climate change. Crop Insurance can protect the financial implications of unexpected crop failures. Currently there are many Crop Insurance products offered, especially in developing countries. There are three types of Crop Insurance products, including actual production history (APH), crop revenue coverage (CRC) and catastrophic (CAT). The effort that can be made by farmers is to choose the appropriate crop insurance product. However, sometimes there is adverse selection in Crop Insurance. This paper analyzes the types of Crop Insurance products based on climate change and strategies for determining the type of Crop Insurance products that are optimal by using Conditional Value-at-Risk (CVaR) for avoidance of risk and loss selection. In addition, in this paper several models have been proposed in previous studies.