African Journal of
Agricultural Research

  • Abbreviation: Afr. J. Agric. Res.
  • Language: English
  • ISSN: 1991-637X
  • DOI: 10.5897/AJAR
  • Start Year: 2006
  • Published Articles: 6858

Article in Press

Farm income stabilization in developing countries: hedging effectiveness of revenue insurance

Abel Tiemtore

  •  Received: 27 May 2019
  •  Accepted: 18 June 2020
This study analyses the risk-reducing performance of revenue insurance for corn producers in Burkina Faso. We apply the Miranda (1991) model to empirical data from the corn sector of 13 agricultural regions of Burkina Faso from 1995 to 2009 to analyze the potential effects of revenue insurance in this sector. Our results show that revenue insurance can reduce farmers' income fluctuation by an average of 40% with variations between agro-climatic zones. The actuarial premium of the revenue insurance (6.5% of the insured amount) is significantly lower than the index insurance premium currently marketed in the country (10% of the insured amount). Our results show that the provision of such insurance could respond more to producers' expectations than isolated mechanisms such as index insurance or warrantage