Risk and Insurance II

What I learned: The discussion begins by talking about risks again. It discusses risks that the majority of famers have (since they have a lot and they dominate the majority of populations in less developed countries). It talks about how to reduce these risks, specifically for farmers. Farm several pieces of land that are far away from each other, from then select crops that may be more successful since the proximity isn't so great. Giving up efficiency by attempting to specialize in more than one profession. This would limit the amount of risk because then if something were to demean the farming effort, an individual would have a plan to fall back on rather than letting the potential risk weigh one down os heavily in their farming effort. The discussion then shifts to the size of the risk and possibly reducing said risk. High interest rates lead to great difficulties as well. Examples of these risks and how potentially demeaning they can be are discussed through Nigeria and Thailand. There are different ways to deal with the risk, of course. That includes "village level", and increasing from there all the way up to federal level. There's also a moral hazard involved. The increasing of funds can be acquired a multitude of ways, but within these countries, religious and cultural aspects can hinder what individuals or even large populations are willing to do about the "risky" status of their economy. The context for community insurance is a difficult conversation for those in the less developed nations as well.

How it relates: Once again, this relates almost identically to the previous blog about "risk and insurance." The only difference is the idea that in order to continue to decrease risk by specializing in more than one profession. High interest rates, village through deferral level ways to deal with the risk, moral hazards, and the context in general for a suggested "community insurance." These are all things that could be taken into consideration when potentially implementing insurance to the people of Sudan through their strong localized governments.