Ruth Hill

Review of evidence on the design and impact of agricultural insurance for smallholder farmers in low- and middle-income countries

Agricultural insurance has long been promoted as a tool to help smallholder farmers manage production and market risks, yet affordable, well-functioning coverage has proven difficult to deliver at scale. This paper reviews peer-reviewed evidence on the design, implementation, and impacts of agricultural insurance in low- and middle-income countries, with a focus on innovations that have emerged since early indemnity-based multi-peril crop insurance programs gave way to index-based and hybrid approaches. It synthesizes findings on ex ante and ex post impacts, on design features that shape cost, basis risk, and payment timing, and on distribution channels and inclusion of women and low-income households. The review finds that insurance can meaningfully protect household consumption and assets after shocks and encourage productive investment beforehand, but that these benefits depend heavily on accurate loss assessment, adequate coverage size, and trust built through distribution partners. The paper concludes with operational recommendations for policymakers and practitioners on product design, subsidies, and distribution, and identifies priority evidence gaps, including the optimal design of subsidies and insurance's potential to address non-weather-related risks.

Aligning private incentives with societal goals in smallholder agriculture

Targeting of beneficiaries in chemical fertilizer subsidy programs: State of knowledge and evidence gaps

Low- and middle-income countries are under increasing fiscal pressure to rationalize spending on fertilizer subsidy programs. Policy reforms shifting expenditure away from subsidies can have beneficial impacts given the well-documented distortionary market effects and negative environmental externalities of fertilizer subsidies. However, such reforms also result in losses and often lower fertilizer use for current beneficiaries. Understanding who is impacted by reform thus requires an assessment of who is currently benefiting, yet there is little systematic work understanding who these programs currently benefit both on paper and in practice. In this paper, we identify low- and middle- income countries with active fertilizer subsidy programs, and characterize the targeting regime of each program based on both explicit and implicit criteria determining eligibility. Then in a selection of case studies, we explore which individuals are receiving subsidy benefits in practice. We find that while many fertilizer subsidy programs are designed as universal, in many countries there are implicit targeting criteria embedded in the way subsidy programs are implemented and/or informal targeting induced by supply shortfalls. Further, we find evidence that regardless of targeting regime, the targeting of subsidy programs is generally pro-poor, driven by the fact that the poor are often concentrated in the agricultural sector.