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A better understanding of how farmers adjust their production practices to cope with extremely wet or dry conditions is essential for developing effective drought mitigation policies and reducing the impact of other natural disasters. Reducing the risk associated with drought and flood in the long-run may be more cost effective than smoothing short-term income losses through disaster relief money. Most existing assistance programs focus on diversifying and stabilizing income risks through crop insurance and direct payments, however there are fewer efforts designed to reduce the long-term agricultural risk. Climate change makes this particularly important, as expected impacts include more droughts and climate variability in the future.