Bolivia: Fondo de Mitigación del Riesgo Agrícola (FMRA)

Fundación PROFIN has developed an innovative index-based insurance scheme that has been piloted in four provinces in the North and Central Altiplano regions of Bolivia. The scheme combines incentives for pro-active risk reduction and a flexible, people-centered index mechanism. In this scheme the trigger is based on the production levels of reference plots of farmland in areas which are geographically similar in terms of temperature, precipitation, humidity, and type of soil.

The reference plots are farmed by farmers who have been identified as good practitioners by their peers. The yields on their plots serve as an indicator of whether production levels have been adversely affected by environmental factors, thus triggering an insurance payout, or by other factors within a farmer’s control. Moral hazard in the scheme – if the reference farmers were to intentionally underperform – is limited by the reputational risks to the farmers in their own communities. The reference farmers also serve as technical assistance agents to promote ideas for increasing yields and reducing disaster impacts.

The system encourages other farmers to match the reference farmers in implementing mitigation efforts to reduce the effects of drought, excess rains, hailstorms and frost, because those farmers run the risk that their own plots will be significantly affected while the reference farmers’ plots will be less affected.
 

Fundación PROFIN
http://www.fundacion-profin.org/fmra.html

Are you sure you want to delete this "resource"?
This item will be deleted immediately. You cannot undo this action.

Related Resources

Other type of resource
24 Jun 2015
Coastal communities living in archipelago countries and small island states in Asia are particularly vulnerable to the impacts of hydro-meteorological hazards such as storms, droughts, landslides, and floods.  Environmental degradation such as defor...
Tags: Other type of resource, Climate Change Adaptation, Resilience and Disaster Risk Management, Risk Transfer and Disaster Management, Urban Risk Reduction
Report
02 Feb 2016
The strategic directions on strengthening National Platforms for Disaster Risk Reduction are intended for use by all stakeholders as a guiding document or manual, which proposes a list of rational options of organizational and practical actions that ...
Tags: Report, Capacity Building for Disaster Risk Management, Risk Assessment, Risk Transfer and Disaster Management, Urban Risk Reduction
Guidance material
28 Feb 2016
The RE.bound initiative has been developed by Rockefeller Foundation, Swiss Re, Goldman Sachs and RMS to link risk transfer coverage for cities with financing for resilient infrastructure. The initiative is developing an innovative version of catas...
Tags: Guidance material, Risk Transfer and Disaster Management
Scroll to Top