A formative evaluation on using smartphone camera data for crop insurance in northwest India. Presented by IFPRI Senior Research Analyst Francisco Ceballos, With Berber Kramer (IFPRI Research Fellow ) and Miguel Robles ( ‎Advisor to Executive Director for Argentina, Bolivia, Chile, Paraguay, Peru and Uruguay, World Bank)

1. Picture-Based Insurance (PBI)
A formative evaluation on using smartphone camera
data for crop insurance in northwest India
Francisco Ceballos
Markets, Trade and Institutions Division
International Food Policy Research Institute (IFPRI)
With Berber Kramer (IFPRI) and Miguel Robles (World Bank)
Accra, March 15, 2018

2. Introduction
 Index-based insurance has challenges:
o Low demand
o Lack of trust and poor ownership
o Basis risk
 Current strand of projects aimed at reducing basis risk and deepening
farmer participation
o Reliance on technology
 One such approach: PICTURE-BASED INSURANCE (PBI)
o Use smartphone camera data to detect crop damage
o Precedent: PhenoCam project
o Proof of concept: Rabi 2016/17 Wheat in Punjab and Haryana
o Ongoing in Rabi 2017/18 season

4. Sowing
Harvest
From Phone to Damage

5. Role of pictures
Sowing
Harvest
Initial picture: “locks-in” crop site before
crop develops  reduce tampering
Repeat pictures: monitor growth
and damage (if present)
+ Close-up picture: requested
when damage occurs
(e.g. allows for pest detection)

6. ‘Ghost’ Image for Repeat Pictures

7. Capturing repeat pictures…

8. Are farmers able to take
pictures regularly?

9. Picture-taking activity
 Determinants:
o Farmers from lower castes are less likely to participate and to take pictures
o Farmers above 40 years are more likely to take pictures
o Farmer’s education, experience with smartphones, others, do not seem to matter
 Interestingly, farmers seem to like taking pictures  serves as nudge for
monitoring field
Total number of pictures taken by farmer

10. Does PBI reduce basis risk?

11. Performance of Picture-Based Insurance

12. 19.84 19.82
No payout Payout
CCEsYield
(Quintalsperacre)
Performance of Weather Index-Based Insurance (WBI)

13. Does PBI induce tampering
and/or moral hazard?

14. Result 1: Effects of PBI coverage on input usage at endline
 No evidence of worsened management practices

15. Result 2: Effects of PBI coverage on estimated damage
 No evidence of worsened yields or increased rates of damage
 Having to upload pre-damage pictures may limit moral hazard
 Moral hazard may also require experience, explore dynamics

16. Does PBI increase farmer
interest without adverse
selection?

17. Willingness to pay by product
736 715 866 1,052
0
200
400
600
800
1,000
1,200
WBI only WBI + pictures PBI only WBI+PBI
AveragewillingnesstoPay(Rs.)

18. Adverse selection? Result #1
 Difference in WTP for “WBI only” and “WBI + PBI”
0
100
200
300
400
500
600
700
Crop Cutting Yields Damage Due to
Mismanagement
Damage Not Due to
Mismanagement
Willingnesstopay
extraforPBIcoverage
Below Median Above Median

19. Adverse selection? Result #2
 Comparing plot that farmer enrolls with plots not being enrolled
0
0.2
0.4
0.6
0.8
1
Above Median
Distance to
Irrigation
Good Soil
Fertility
Above Median
Yields Last
Year
Above Median
Rental Value of
the Plot
Above Median
Sales Value of
the Plot
Plot is Well
Drained
Other Plots Selected Plot

20. Moving forward

21. Rabi 2017/18 season
 Personalized crop advisories, relying on pictures taken
o Increases value of taking pictures
 No smartphone or data plans provided  Farmers still take pictures
 However, 2 pictures per week is perhaps ambitious
o Requirement for greenness curve (rule of thumb: 20 pictures in season)
 But system may be feasible with few pictures at key growth stages, e.g.:
o (1) Sowing  (2) Emergence of ears  (3) Before harvest
o In addition to pictures when damage occurs, including close-ups
o Aim for next season: focus on quality through targeted follow-up

22. Is smartphone penetration key?
 So far project has relied on farmers owning an (inexpensive) smartphone…
 …but that does not necessarily have to be the case
 System relying on village representatives:
o Own a smartphone or even provided with one
o Responsible for visiting all insured farmers’ field at regular intervals to take
repeat pictures
o Such a system may even improve quantity and quality of pictures

23. Conclusions
 PBI approach is viable
o Farmers do take pictures and show increased sense of ownership
o Reduces basis risk
o No tampering, moral hazard, adverse selection in first season
o However, need for subsidies remains
 Areas for future research:
o Moral hazard dynamics over time
o Developing automated procedures for identifying damage
o Identifying growth stages from pictures to improve accuracy of index products
 Vision: PBI as TOP-UP product (idiosyncratic risk), over existing area-yield
or weather-index products (covariate risk)

24. THANK YOU
For more information:
Project notes available at: https://www.ifpri.org/project/PBInsurance

25. Additional slides

26. Capturing features from ground pictures

27. Comparison to Satellite Imagery