High-resolution soil moisture data: a new pathway to affordable index insurance

Thursday, May 28, 2020

Watch full webinar recording

MiN members joined an exclusive webinar presented by VanderSat, a Dutch provider of satellite-observed water, temperature and vegetation data products and services. Head of Impact Strategy Lexy Ratering Arntz and CCO Berend de Jong explained how, by providing soil moisture data at field level with a long historical record and without cloud interference, VanderSat enables the development of scalable index insurance products.

Vandersat takes free ‘coarse’ (25km x 25km) resolution data provided by the European Space Agency (ESA) and crunches it through their patented algorithm to produce very high resolution data at 100m x 100m, which then creates actionable information for agricultural applications - such as inclusive insurance.

Lexy began by outlining the high basis risk of conventional index insurance based. Rainfall is only an indirect measurement of plant available water, she said, and the coarse spatial resolution for soil moisture is too broad to be really useful. In addition, normalised difference vegetation indices (NDVIs) are hindered by cloudy conditions, darkness and saturation of the signal. A lack of consistent historical records for index development is also a challenge.

VanderSat’s method allows soil moisture to be measured not only in terms of rainfall but all the water available for plant uptake - a critical parameter to calculate the ‘soil moisture deficit’ which is then directly linked to agricultural losses due to drought. Satellites provide data ranging on a daily basis in Europe up to every three days near the equator, regardless of cloud cover or hours of darkness. Finally, an 18-year data archive allows accurate comparisons with previous growing seasons.

“Passive microwave remote sensing uses wavelengths that penetrate through clouds,” said Lexy. “Every time satellites fly over we get soil moisture information, an important variable in understanding and making drought risk insurable, especially for rain-fed smallholder farmers. The parameters result from a lot of hydrological processes and are a direct measure of the water available for the plant to take up.”

Berend pointed out that the Intergovernmental Panel on Climate Change (IPCC) used VanderSat data as a source for the 2018 State of the Climate Report. Current projects include Soil Moisture Index insurance for smallholder maize farmers in Kenya - known as  ‘aMaizing’ - funded by the Netherlands Enterprise Agency (RVO). AMaizing was developed together with Acre Africa and the International Centre for Tropical Agriculture (CIAT), and underwritten by a Kenyan insurer and reinsurer. There’s also a pilot project running in Mexico.

4,500 policies were written in Kenya’s 2019 short rain season, scaling to 10,000 this year. Lexy explained that only maize is currently covered, but it’s hoped to expand to include other crops and grains, and also to cover excess soil moisture. AMaizing is distributed through Acre’schampion farmermodel which uses respected farmers in the community who receive an incentive when they sign up other farmers to the scheme. “We’re also looking at partnering with other companies such as agricultural input suppliers or financial services providers to create tailor-made and packaged insurance solutions,” said Lexy. “For instance, bundling products with credit or non-agricultural insurance really allows us to serve the smallholder farmer best and also to bring down the distribution costs, which creates sustainability of the model. We’re involved in a lot of surveys in the communities, so the demand is farmer-led. We are able to create tailor-made bundled insurance packages which will really ensure market demand.”

Following the presentation, questions were asked about the availability of data for different regions, different crops and areas where intercropping is common. Lexy explained that as well as differences in the frequency of satellite fly-overs, data is challenging for very high mountainous or rocky areas, and dense vegetative areas like the Amazon. “We can’t monitor Everest!” she said. The VanderSat system works for all main agricultural crops as it provides data from a depth of approximately 3cm to 15cm, which is where most crops have their roots. Intercropping is not currently covered, she said, but they would be open to looking at it - “instead of being crop-specific, it would have to be crop agnostic.” Similarly, VanderSat are looking at mapping flooding as well as drought - there have been some early trials in Malawi, but the system is not yet operational.

Summing up, MiN Executive Director Katharine Pulvermacher, who moderated the session, hoped there would be more webinars on specific projects in the future - so watch this space!