Hedging against the horsemen

摘要

Ask an Ethiopian peasant what would most improve his life, and he is unlikely to mention weather derivatives. Nonetheless, some brainy people at the World Food Programme (WFP), the UN body charged with saving the starving, think they could save more people by using arcane financial instruments. A typical famine might unfold like this. First, the rains fail. Then the harvest fails. Then people start to go hungry. After a while, the television cameras arrive. Western donors, moved by pictures of swollen-bellied tots, reach into their pockets. Eventually, truckloads of food aid arrive. But they arrive too late for many.