Insurance and Risky Opportunities Discussion Questions

If it was a good year

• If you took a loan for improved seeds, did not purchase insurance and experience a drought, how will you cope?

• What can a farmer do so that she’s less likely to have a bad outcome?

• When would you buy insurance?

-Would you buy insurance with high quality or traditional seeds?

-When would you be glad to have bought insurance?

-Since the price of the insurance is driven by how often droughts happen, is the insurance worth it at these odds? Does it make better sense at different oddes (for example 1 out of 7)? What are ways you could get enough information to answer this question for your farm?

If it was a bad year

Answer the same questions

Key Points

Insurance can help make productive decisions less risky but it comes at a cost.