The U.S. Department of Agriculture Risk Management Agency is piloting two new index-based insurance products aimed at the apiculture industry (that’s beekeeping to you and me).
The new insurance program uses either a rainfall or vegetation index, depending on the location of the coverage. Whether beekeepers get a payment depends on the amount of rainfall or the amount of greenness as measured on the indices. Deviation from the historical norms could result in a payout to the farmers.
It’s seen as the only way to offer insurance coverage for honey and wax production as it insures against bad weather conditions that are detrimental to the size and value of a crop. Insuring the quality of honey or health of bees is seen as too difficult to achieve yet. The new program is available in 21 states in the U.S. as a pilot.
They’re not expecting a massive take-up to begin with as this is a very new concept for the beekeepers industry, but this is further evidence of the application of index-based insurance to combat weather deviation from accepted norms. Having U.S. government agencies endorse weather risk management practices in this way is good for the industry as a whole.
More details about this innovative use of weather risk management here.