This study analyzes the relationships between rainfall per crop gestation period (planting – harvesting) and crop yields and study the likelihood of crop yield losses. It makes recommendations on how this information could be used to develop a trigger for index insurance to help mitigate the financial risks to farmers and lenders who make loans to farmers in Ghana. The focus of this paper is on rainfall and crop yield and explores the potential for a drought loss insurance index trigger. This study concludes by describing limitations and challenges that must be overcome in order to develop such risk management tools and by describing the potential for crop loss index insurance based on area crop yield in northern Ghana.
The Katie School of Insurance, Illinois State University