below a specified threshold. Despite the wide consensus gained by the proposed rainfall index contracts among government officials, insurers, and producers, the implementation of the planned pilot programs in Morocco did not take place. The main reason for this failure was that rainfall precipitation in the selected areas showed a downward trend, and the reinsurance company involved in the deal made the cost of the insurance prohibitive for producers. The experience developed through Morocco’s feasibility study and planned implementation project, however, generated expertise that led to the realization of other WB-facilitated deals (for example, in India) and of other independent programs (for example, in Colombia). Canada
The Corn Heat Unit insurance program is a weather index-based
insurance product offered by the AFSC to protect farmers against the financial impact of negative variations in yield for irrigated grain and silage corn. The contract is designed to insure against lack. The index has been designed to indemnify the policyholder against an annual CHU below Threshold Corn Heat Unit (TCHU). The CHU index represents the energy available for the development of corn level at the specified weather station. The CHU is estimated from daily maximum and minimum temperature,
beginning on May 15 each year. The Celsius-based formula used to calculate daily CHUs is defined as follows (Brown and Bootsma, 1993):
γmax γmin CHU
= [] γ min
= 3 ,33 × [T max ×
5 9
= T min 2
Where Tmin and Tmax are the daily minimum and maximum temperatures, respectively. The daily CHU values are calculated from these temperatures. The daytime relationship involving Tmax, uses 10°C as the base temperature (if Tmax is less than 10, its value is set at 10) and 30°C as the optimum temperature, as warm-season crops do not develop when daytime temperatures fall below 10°C and develop at a maximum rate at around 30°C. The nighttime relationship involving Tmin uses 4.4°C as the base temperature below which daily crop development stops. (If Tmin is less than 4.4, its value is set at 4.4.) The CHU value is calculated by taking into account the functional relationship between daytime and nighttime temperatures and the daily rate of crop development. The accumulation of CHU stops on the first day on buying the insurance policy, farmers must elect the dollar coverage per acre, select the weather station for settlement purposes, and indicate if they prefer a hail endorsement to the contract or the variable price benefit.
140
− 4 , 4 + γ max
− 10 ]− 0 .084 × [T max − 10 ]2
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