Big Data Used for Drought Insurance

Big Data

Due to climate change, drought happens in countries like US, Asian countries and Middle East. / Photo by: krisckam via 123rf


Drought in the agricultural sector has been the subject of much distress for the communities that rely on these swathes of land. One of the ways that organizations have found could alleviate this is through drought insurance and attempting to address the underlying question of how the public can help farmers deal with climate risk. This isn’t just a problem in the US, as Asian countries and areas in the Middle East also encounter drought. Instances of drought have only become more prominent as climate change continues to make parts of the world warmer than ever before.

The use and concept of drought insurance is a long-term goal and quite a noble one, if it works effectively. It would essentially mitigate most of the problems that farmers deal with in times of extreme climate conditions, and without the need for external government support. There are a lot of technical problems that come with this, however, particularly in Australia where droughts are known to cause significant damage to the livelihoods of citizens in different areas of the country. There exists a solution to this problem, which could make weather-based insurance much more streamlined and more usable in the future: multi-crop insurance. It covers a wide range of adverse effects, but for the longest time has failed to make an impact in Australia. The issue is not just limited to Australia, as other countries have encountered difficulty making multi-crop insurance work, as well. These difficulties are credited to a lack of information among participants and insurers regarding who actually signs up for the insurance and the criteria behind it. Farms with insurance are also feared to put less effort in preparing for drought due to the safety net that their insurance provides. The use of big data, both from farm production and risk management data sets, could change the industry. Having more concrete data would allow insurance companies to assist farmers more effectively. The appropriate farms could be targeted, and the amount provided would be reasonable.