Recent research suggests that droughts and other natural disasters may impact farmers’ cognition as well as their agricultural income. As water becomes scarcer and the risk of a poor harvest increases, the stress of coping with a drought may cause farmers to perform worse on other mental tasks. In Brazil, researchers examined whether rainfall scarcity affected performance on cognitive tasks, and if so, whether offering rainfall insurance could help alleviate this stress. Results indicate that experiencing low rainfall or being primed to think about the consequences of low rainfall reduced farmers’ cognitive ability and that offers of free index insurance did not mitigate these effects.
Natural disasters can have lasting impacts that continue to harm communities after the direct economic effects have dissipated. In particular, droughts have been linked to higher infant mortality, later reductions in educational attainment, and lower lifetime earnings for those born during or directly after the drought.1,2 In addition, recent research indicates that these natural disasters may also harm farmers’ cognition in the short term. As water becomes scarcer and the risk of a poor harvest increases, the stress of coping with a drought may cause farmers to perform worse on other mental tasks. Droughts and other natural disasters may then lead to suboptimal economic choices at exactly the time when it is most crucial for farmers to allocate resources efficiently. To what extent does the risk of drought affect cognitive performance, and can tools that mitigate economic risk also limit these cognitive effects? Researchers tested whether rainfall scarcity affected poor farmers’ cognition, and if so whether offering free index insurance could mitigate these effects on cognitive performance.
Researchers partnered with Ceará State’s Foundation for Meteorology and Water Resources and the Rural Development Secretariat of Ceará to evaluate the cognitive impacts of exposure to rainfall risk and of a supplemental insurance program.
The study recruited 4,087 farmers across 47 municipalities in Ceará to participate in the study; of these, 2,822 participated in at least one mobile-phone based survey. Participants were surveyed six times over the phone through an interactive voice response system. During each call, half of the participants were randomly selected listen to a message designed to “prime,” or remind, them about the effects of drought in their municipality. The other half of participants listened to a neutral message.
Through a separate set of phone calls, researchers offered the free supplemental insurance program to 1,192 randomly selected farmers. The product would pay out an additional BRL 170 (US$65) to farmers, on top of the payments they receive from the existing public insurance program, in municipalities that suffered greater than 70 percent harvest losses. This payout would come in June, two months before the (more generous) government payout in August.
Researchers measured the effects of exposure to rainfall risk and risk mitigation through the insurance product on farmers’ performance on a set of cognitive tasks.