EC approaches to Disaster Risk Reduction in Africa DevelopmentDG DevelopmentUnit B2 Unit –Policies for Sustainable Management of Natural Resources Presented by: Wim Olthof

Climate Change and Crop Insurance in the United States OECD-INEA-FAO Workshop on Agriculture and Adaptation to Climate Change June 2012

Full Publication Agricultural producers face a series of risks affecting the income and welfare of their households. These are mainly production risks related to: weather conditions, pests and diseases, market conditions etc. Consequently, the income stability of agricultural stakeholders can be also affected. In the last years the European Union is considering a possible integration of risk management in the Common Agricultural Policy and is analysing risk and crisis management strategies to provide an improved response to crises in the agricultural sector. This report makes a review of the

The development of agriculture and the rural economy play a crucial role in China’s socioeconomic system. Agriculture insurance has become key in ensuring the growth of agriculture and stabilizing farmers’ income when faced with natural disasters. The focus of this article is the history of the development of Chinese agriculture insurance since the 1980s and the trial of a new agriculture insurance launched in 2007, the policy details implemented in selected provinces, and the operation models. Using results from an investigation and field survey conducted since 2007 in Hunan Province, this article analyzes the performance and effects of this agriculture insurance trial run from the perspectives of different participating stakeholders, and with an emphasis on the program’s four principles. The experience and lessons learned are summarized, followed by recommendations on how to ensure the smooth operation and sustainable development of this new agriculture insurance program.

Asia and the Pacific region has one of the highest exposures of any region in the world to natural hazards including typhoons, floods, landslides, droughts, earthquakes, volcanic eruptions and tsunamis. Weather-related risks, particularly hurricanes, flooding and drought, are a frequent occurrence and affect crop yields, livelihoods and assets, and the personal safety of vulnerable groups across the region. The frequency with which these disasters occur often taxes the ability of such groups to rebound quickly, increasing their risk of hunger and malnutrition. Low-cost agricultural insurance schemes are increasingly viewed as mechanisms for providing social protection to the increasing numbers of people affected by such risks and in helping to lessen the impacts they suffer owing to such shocks.

Insurance and Reinsurance for Natural Catastrophe Risk in Africa Date: November13-14, 2006 Agriculture and Weather Cover PPT Presentation

Agriculture remains a source of livelihood for almost half of humanity. It is also a source of growth for national economies and can be a provider of investment opportunities for the private sector. However, millions of poor people face prospects of tragic crop failure or livestock mortality when, as a result of climate change, rainfall patterns shift or extreme events such as drought and floods become more frequent. Agricultural insurance is key in assisting farmers, herders, and governments lessen the negative financial impact of these adverse natural events.

Agricultural insurance in developed countries originates in named peril products that were originally offered by private companies approximately two hundred years ago, first in Europe and then in the United States. Today, many agricultural insurance products are offered, most of them heavily subsidized by governments. In the context of developed economies, this article examines the evolution of agricultural insurance products, the economics of the demand and supply sides of agricultural insurance markets, and the economic welfare, political economy, and trade relation implications of private and public agricultural insurance in developed countries.

In this paper we review the historical relationship between the work of applied economists and policy makers and the institutions that came to characterize the commodity and risk markets of the 1980s. These institutions were a response to the harmful consequences of commodity market volatility and declining terms of trade. However, the chosen policies and instruments relied on market interventions to directly effect prices or the distribution of prices in domestic and international markets. For practical and more fundamental reasons, this approach failed. We next discuss how a growing body of work contributed to a change in thinking that moved policy away from stabilization goals toward policies that emphasized the management of risks. We distinguish between the macroeconomic effects of volatile commodity markets and the consequences for businesses and households. We argue that both sets of problems remain important development issues, but argue that appropriate policy instruments are largely separate. Nonetheless because governments, households and firms must all respond to a wide range of sources of risk, we emphasize the role for an integrated policy by government.

Risk characterizes life for many of the world’s poorest households. They are more likely to be located in environments where livelihoods are highly susceptible to weather and price variability and where health risks are pervasive. When these risks are uninsured, they not only reduce the current welfare of poor rural households, but also threaten future income growth and thus perpetuate poverty. Reducing the risks faced by poor households, and enabling poor households to better deal with bad events when they do occur, is essential to improving their welfare in the short run and their opportunities for income growth in the long run. This note draws on the briefs published in the IFPRI’s 2020 Focus “Innovations in Insuring the Poor” and other work, to examine the potential for agricultural insurance, and in particular index insurance, as a risk management tool for rural households in sub-Saharan Africa.