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Climate change poses one of the main challenges for agriculture, also in Europe. In particular, an increase of extreme weather events is expected to strongly impact economic revenues and the provision of ecosystem services by agroecosystems. Grassland farming systems need to adapt to cope with increasing climate risks and climate change.

We address these challenges in the interdisciplinary research project InsuranceGrass (Assessment of formal, natural and social insurances: how to cope best with impacts of extreme events on grasslands for sustainable farming systems?) financed by the Swiss National Science Foundation and the  Deutsche Forschungsgemeinschaft (project duration 2022-2025).

We study the potential role of financial, natural and social insurance mechanisms to cope with increasing climate risks. We reveal interdependencies between these insurance types and derive optimal industry and public policies. First, we identify new pathways for financial insurance solutions for climate extreme events in grassland farming systems, e.g. based on weather index insurance and satellite imagery. Second, we quantify the role of natural insurances that naturally buffer production risks, e.g. by using species-rich grasslands. Third, we explore the potential of social insurances, especially arrangements within community-supported agriculture and payments for ecosystem services. We use case studies of grassland farming systems in Switzerland and Germany. Methods used range from field trials, surveys to statistical, ecological-economic, and agent-based modelling.

Financial, natural and social insurances may be substitutes or complements, and affect farmer behaviour in different ways. Thus, policy support for any of the three forms of insurance will have effects on the others, which need to be understood. For example, subsidies for financial insurance may dis-incentive social and natural insurance and thus make agriculture less sustainable overall. We identify and quantify these trade-offs and develop solutions for optimal integrated policies.