Abstract
In Mediterranean-climate regions, irrigated agriculture is especially vulnerable to the risk of hydrological drought and irrigators are particularly concerned about its negative effects. During a hydrological drought episode, irrigators receive insufficient water to meet their crops’ water needs, giving rise to the so-called ‘water supply gap’. In such circumstances, agricultural production and irrigators’ incomes are considerably reduced. In order to minimize the negative effects associated with water supply gaps, a new index-based drought insurance scheme for irrigation is proposed, linked to the variable ‘stock of water available in reservoirs’. The proposal, although tailored to Spain, could be easily adapted to other countries or regions because the features of hydrological drought risk are similar worldwide. It is expected that the proposed scheme will improve drought risk management in irrigated agriculture, stabilizing irrigators’ incomes and guaranteeing the sustainability of irrigated agriculture in the face of global change.
Highlights
Agriculture is an economic activity exposed to multiple risks that can negatively influence farmers’income and wealth [1,2,3]
Who proposed an in-field income loss assessment insurance in Spain to cover the risk of hydrological drought in irrigated agriculture, very similar to the other agricultural insurance schemes available in this country
The only problem explicitly mentioned is that of water trading, with the assumption that the implementation of this insurance scheme would involve the prohibition of any water transfers by the irrigators insured; this requirement would be difficult to enforce in a real-life setting because of the existence of informal water markets
Summary
Agriculture is an economic activity exposed to multiple risks that can negatively influence farmers’income and wealth [1,2,3]. Irrigation techniques have been developed worldwide as a strategy for both increasing agricultural production and reducing drought-related production risks It is only when meteorological droughts last for a long time and become hydrological drought episodes (instream flows and reservoir levels below normal) that irrigated agriculture is affected: the availability of water for irrigation is reduced, and irrigators cannot fully meet all their crop water needs. This situation, the so-called ‘water supply gap’, entails notable losses of production and income for irrigation farmers
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