Pakistan has become a poster child for extreme weather events such as floods and droughts in recent years. The frequency and severity of these events are expected to increase in the future due to predicted climatic changes. This scenario suggests the likelihood of increased crop damage in flood- or drought-prone areas, and hence the need for risk-reducing mechanisms. This paper attempts to determine whether crop insurance is an acceptable tool against flood and drought events in rural Pakistan. It also analyses the factors influencing a farmer's willingness to pay insurance premiums. In a rural farm-household survey, farmers were asked about their willingness to pay for a hypothetical crop insurance programme employing a “double-bounded dichotomous contingent valuation method”. The results revealed that around 30% of the respondents accepted the idea of crop insurance as a tool to reduce and mitigate the financial risks associated with floods and droughts. Our findings suggest that the frequency and severity of the previous weather-related extremes, socio-economic settings, farm typology and the farming communities’ ability to pay need to be taken into consideration when introducing crop insurance programmes against flood or drought in Pakistan. Furthermore, disseminating awareness among farming communities about the future climatic changes and the associated risks of the occurrence of extreme weather events is imperative. The government's willingness to share/subsidize insurance premiums may increase the demand for crop insurance among smallholders in Pakistan and protect them from the negative repercussions of these extreme weather events in order to sustain their livelihoods.

Changes in climate may have both beneficial and harmful effects on crop yields. However, the effects will be more in countries whose economy depends on agriculture. This study aims to measure the economic impacts of climate change on crop farming in Bangladesh. A Ricardian model was used to estimate the relationship between net crop income and climate variables. Historical climate data and farm household level data from all climatic zones of Bangladesh were collected for this purpose. A regression model was then developed of net crop income per hectare against long-term climate, household and farm variables. Marginal impacts of climate change and potential future impacts of projected climate scenarios on net crop incomes were also estimated. The results revealed that net crop income in Bangladesh is sensitive to climate, particularly to seasonal temperature. A positive effect of temperature rise on net crop income was observed for the farms located in the areas having sufficient irrigation facilities. Estimated marginal impact suggests that 1 mm/month increase in rainfall and 10°C increase in temperature will lead to about US$4-15 increase in net crop income per hectare in Bangladesh. However, there will be significant seasonal and spatial variations in the impacts. The assessment of future impacts under climate change scenarios projected by Global Circulation Models indicated an increase in net crop income from US$25-84 per hectare in the country. The findings of this study indicate the need for development practitioners and policy planners to consider both the beneficial and harmful effects of climate change across different climatic zones while designing and implementing the adaptation policies in the country. Literature survey of the Web of Science, Science Direct and Google Scholar indicates that this study is the first attempt to measure the economic impacts of climate change on overall crop farming sector in Bangladesh using an econometric model.