Goodson, Mookie
(2022)
Strategies for applying distributed ledger technologies in
index-based crop microinsurance schemes.
Master's Thesis, University of Pittsburgh.
(Unpublished)
Abstract
Support for sustainable smallholder farming has long been recognized as a key to healthy
and resilient food production. The ideal situation – a global community of geographically
dispersed smallholders enmeshed in local economies, thereby reducing waste – is incompatible
with the centralizing forces currently dominating development. One need only view the COVID�19 pandemic and associated supply chain breakdowns to see the weakness of an overly
connected global food system rife with perverse incentives, namely the centralizing nature of
specialization and industrialization.
Crop insurance is a form of proactive disaster risk management used to diffuse risks to
agricultural production across space and time with other producers. It is a form of support that
countries have long endeavored to implement so that farmers avoid turning to suboptimal
traditional risk coping mechanisms. Notwithstanding, traditional insurance programs have been
plagued by well-documented challenges creating a severe gap in service offerings, especially
among smallholders in the developing world. As climate change raises agricultural risks through
heightened uncertainty, it is increasingly necessary to augment the security of smallholder farms
through closing the coverage gap.
Fortunately, recent technological advancements have improved the prospect of
overcoming barriers to reaching smallholders. Combining the decreasing cost and increasing
sophistication of remote sensing and satellite technology with smart contracts and other
innovations enabled by distributed ledger technology has the potential address many of the
challenges of traditional insurance provision. Blockchain technology affords this potential
through providing architecture to reduce transaction costs, increase trust and access, and deepen
opportunities for reinsurance. The transparency and immutability of blockchain engenders a
unique coordinating capability that allows for benefits superior to other organizing instruments.
Despite limitations concerning the current state and maturity of blockchain technology, the pace
and direction of development offer promise for near-term composability with key systems and
functionality.
This research uses a literature review to trace historical challenges in providing crop
insurance and analyzes the opportunity for blockchain to mitigate them. It focuses on evaluating
the potential to bolster the provision and uptake of a particular type of crop insurance – index�based microinsurance – through the combination of blockchain technology and public-private
partnerships. The aim is to provide an analysis of how blockchain applications can improve
existing crop microinsurance schemes and a guideline for how public-private partnerships should
be organized to optimize implementation. Furthermore, this research holds in mind the ultimate
goal of creating true at cost peer-to-peer index-based crop insurance. That is, after initial
investment, coordination, and monitoring by a public-private partnership to overcome startup
barriers, it is possible, and optimal, to create new regional smallholder insurance regimes running
on decentralized infrastructure.
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Details
| Item Type: |
University of Pittsburgh ETD
|
| Status: |
Unpublished |
| Creators/Authors: |
|
| ETD Committee: |
| Title | Member | Email Address | Pitt Username | ORCID |
|---|
| Committee Chair | Murtazashvili, Jennifer Brick | | | | | Committee CoChair | Nelson, Paul | | | | | Committee CoChair | Murtazashvili, Ilia | | | |
|
| Date: |
29 September 2022 |
| Date Type: |
Publication |
| Defense Date: |
2 August 2022 |
| Approval Date: |
29 September 2022 |
| Submission Date: |
9 August 2022 |
| Access Restriction: |
No restriction; Release the ETD for access worldwide immediately. |
| Number of Pages: |
43 |
| Institution: |
University of Pittsburgh |
| Schools and Programs: |
Graduate School of Public and International Affairs > Public and International Affairs |
| Degree: |
MID - Master of International Development |
| Thesis Type: |
Master's Thesis |
| Refereed: |
Yes |
| Uncontrolled Keywords: |
blockchain, crop insurance, DLT, degrowth, index insurance, decentralization, smallholders |
| Date Deposited: |
29 Sep 2022 14:29 |
| Last Modified: |
29 Sep 2022 14:29 |
| URI: |
http://d-scholarship.pitt.edu/id/eprint/43566 |
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