A1034
Title: Forecasting agricultural financial risk based on a linear index insurance model
Authors: Rana Amani Desenaldo - RPTU Kaiserslautern-Landau (Germany) [presenting]
Joern Sass - RPTU Kaiserslautern-Landau (Germany)
Abstract: The aim is the calculation of financial risks of paddy crops in all provinces of Indonesia. The first stage of this calculation is identifying the payouts for each month from 2000-2015 according to the monthly accumulated precipitation value. A linear index insurance model is used as the base for this payout identification. The second step is to forecast the payouts using singular spectrum analysis (SSA) or possibly an auto-regressive integrated moving average (ARIMA) approach. The maximum indemnity is set at 6 Million IDR per hectare per planting season, a value that is based on Indonesian Law. Some additional analyses, such as comparisons between the planting seasons and the provinces, are also included in the process. With three planting seasons and 34 provinces, having highly subsidized premiums and facing missing data, there are many factors to be considered in discussing good policies and benefits of such an insurance against agricultural risk.
