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Abstract
This article studies the viability of an area-based crop insurance
in Castro county, in the State of Paraná. In particular we estimate the following indexes: reduction of the systemic risk, the optimum level of
coverage, the correlation between the regional and the individual yields
and the impact of the level of aggregation of yields on the risk reduction.
The empirical analysis was carried through for corn and soybean, in the
period of 1990 the 2002, with county data and in the period of 1994 the
2003, with individual data. Results shown that area-based crop insurance
could be used as a reasonable alternative to manage risk in the region,
due to the fact that most producers shown a relative risk reduction.