Development of crop-based rainfall index-setting and alternative index breach assessment methods for WIBI-LR

This paper presents an alternative but crop science-based approaches to index-setting and index breach assessments for a weather index-based insurance for low rainfall (WIBI-LR) for a rainfed rice crop. At present, indices for WIBI-LR are established via climate risk analysis wherein large data sets between crop production reports and historical weather are cross-analysed. However, in the absence or lack of data sets or low reliability of data sets, derived indices tend to be poorly applicable, causing wrong index breach assessments and payouts which are unfair to the insurance client or insurance provider or to both parties involved. Hence, the scale-up WIBI project in Mindanao focused on technical development of the WIBI-LR as a product and investigated the rice crop's daily water requirement via an evapo-transpiration experiment. Grain yield reductions were determined per crop stage due to prolonged periods of unsatisfied crop water requirement (CWR). Three rice varieties were used for the evapotranspiration experiment namely: NSIC Rc238, Rc226 and PSB Rc82. Results of the experiment showed similar trends of water use across varieties and crop stages with peaks of transpired water averaging at 10 mm d-1 and occurring between 60-80 d after transplanting (DAT). While grain yield reductions in Rc82 were quantified under 10-d drought impositions at early- and late-vegetative, early- and late-reproductive and early-maturity phases, it was found that the reproductive phase to be most sensitive to drought stress. Results from the two experiments were utilized to craft an alternative breach assessment procedure and client payout computations. Comparisons of payouts were carried out for the WS2015 insurance cycle in Davao and Bukidnon during the WIBI project in Mindanao and loss ratios between the two methods of payout computations were calculated. Based on results, the alternative approach was more business-promising for it had lower loss ratios and with breach assessments and client payouts more appropriate.