Grasslands are essential for global milk and meat production. Climate change and growing frequency of extreme weather events are expected to increase variability in production. This study explores how plant diversity can act as natural insurance against drought risks in grasslands using theoretical model and simulation. Examining sown diversity from a portfolio perspective, we identify mechanisms underlying its insurance value, including the statistical averaging effects and community asynchrony. Our findings demonstrate that, within productive grasslands, modest plant diversity can mitigate a substantial portion (37%) of the risk, offering a sustainable climate adaptation strategy in production-oriented ecosystems.
