In South Asia, livelihoods are intricately intertwined with agricultural production, and thus highly dependent on weather. For millennia, the yearly monsoon rains have been the lifeblood of agriculture, but climate change is making this annual boon increasingly unpredictable both in timing and intensity, exposing farmers’ livelihoods to increased production risks.
There is considerable interest within the international development community in mitigating these risks through insurance. While insurance has been around for a very long time, many of its more traditional forms have suffered from low demand and asymmetric information between insured and insurer, giving rise to adverse selection and moral hazard.
The agricultural research community has responded to these challenges by identifying and developing research-based innovations for agricultural insurance, such as index-based insurance programs that can minimize the severity of adverse selection and moral hazard; the use of cutting edge remote sensing and information technologies; and the bundling of insurance with novel “climate-smart” agricultural technologies and practices (CSA) that are more resilient to adverse weather conditions than traditional technologies and practices, thus serving an important risk management function in their own right.
In order to better understand how CGIAR research can further contribute to the development, implementation, and evaluation of agricultural insurance programs, IFPRI organized a regional dialogue in Dhaka, Bangladesh on December 17. The event was mounted in partnership with the CGIAR research programs on Policies, Institutions and Markets (PIM) and Climate Change, Agriculture, and Food Security (CCAFS), as well as the Cereal Systems Initiative for South Asia (CSISA).
Policy makers, practitioners, and researchers from Bangladesh, India, and Nepal convened to share their experiences with implementing agricultural insurance across the region, and to learn about the latest agricultural research on this subject. The chief guest, Wais Kabir, executive director of the Krishi Gobeshona Foundation, and keynote speaker, Saleemul Huq, director of the International Center for Climate Change and Development(ICCCAD), helped to lay the foundation for the day’s discussion.
Huq’s keynote address highlighted the role of agricultural insurance as an instrument for meeting the key targets in the Paris climate agreement—not only by offering compensation for crop losses and other economic damage, but also by providing a mechanism to improve adaptation, with subsequent benefits from reduced agricultural sector emissions. The workshop presented evidence and case studies that vividly illustrated how research can help improve insurance products and programs to help meet compensation, adaptation, and emissions targets.
One of the main challenges in implementing the largest agricultural insurance program in South Asia—India’s Pradhan Mantri Fasal Bima Yojana (PMFBY)—is loss assessment: To verify losses, PMFBY aims to measure average yields at the village level through intensive crop-cutting exercises. This is a daunting task, requiring crop samples to be collected from three million fields within the short period before harvest. Herein lies an important role for the agricultural research community and the CGIAR more specifically. Agricultural research has helped advance the use of satellite imagery and other remote sensing techniques for crop loss assessment, and case studies are showing that it is possible to use such methods to detect prevented or delayed sowing, which could ultimately reduce the number of crop samples required for village-level yield assessments.
While promising, remote sensing is hardly a panacea. First, the resolution of open-access or affordable satellite imagery is still too coarse to detect plot-level losses. Second, the notion of satellites orbiting the earth and collecting images from space is an abstract concept to many farmers, and much evidence has shown that insurance products must be presented with simplicity and transparency to generate sufficient interest among potential buyers. Third, data processing and evaluation of remotely sensed images is often a major challenge. Unmanned aerial vehicles (UAVs) offer higher resolution imagery than satellites, but are expensive to operate and may face various regulatory hurdles in different contexts.
There are other solutions that can complement remote sensing techniques and address some of these challenges. The IFPRI-led picture-based crop insurance (PBI) project, for example, demonstrates that it is possible to engage farmers directly in taking a stream of smartphone pictures to document crop losses. Going forward, researchers from CGIAR and other agricultural research institutions will have an important role to play in evaluating and validating different interventions.
The agricultural research community can also play an important role by positioning insurance as one instrument in a larger portfolio of risk management tools. Smallholder farmers can also shield their livelihoods from risk through savings, credit, and informal insurance networks, and by adopting CSA technologies. Examples of the latter include conservation agriculture (a suite of sustainable agricultural and land management practices) and stress-tolerant cultivars such as drought-tolerant maize or flood-tolerant rice.
CGIAR researchers, working with counterparts from national agricultural research systems, have developed many improved seed varieties for various staple crops that can reduce farmers’ exposure to weather-related production risk and increase yield stability. But these stress-tolerant varieties can protect crops only up to a point, leaving production exposed in the event of severe droughts or floods. When sold in tandem with a complementary insurance product, however, the bundle provides a near comprehensive risk management solution, as demonstrated by IFPRI-led research in Odisha, India. Under this approach, weather index insurance can be designed to pay out only under more extreme weather conditions causing catastrophic losses, while CSA technologies shield livelihoods from more moderate weather shocks and accompanying income losses. This can also help lower premiums, improving the demand for insurance.
A final, important issue that arose during the dialogue is that the countries of South Asia vary in many aspects: In topography and the risks farmers face, and in the policy and regulatory environments where insurance markets operate. In India, for instance, the government is very active in promoting agricultural insurance under PMFBY through large subsidies, while in Bangladesh and Nepal, insurance is not a prominent feature of agricultural development strategies or policies. Such differences raise important questions about how to best organize insurance markets and innovation activities country by country. These questions remain unanswered, but may prove to be an important area for IFPRI’s policy research in the coming years.
High-level summary: The event will draw on the latest evidence and experience from current nutrition-sensitive and nutrition-specific programs, and will explore the implications for acting at scale with such interventions, including financing, return on investment, communication, advocacy, monitoring and evaluation dimensions.
Date: September 7-8, 2017 | Kathmandu, Nepal |Hotel Yak and Yeti
Objective: Advance multi-stakeholder and multi-sectoral national and subnational efforts to address nutrition as a priority and scale up nutrition efforts together. Additionally, address budgeting for nutrition at the regional, country and subnational level, including domestic, public and private financing.
Outcome: Key public sector, business, donor and civil society decision makers raise the profile of nutrition in their home countries and find effective ways to work together.
Participants: A mixed group of policy and program planners, and nutrition experts, working with the following institutions:
- The target participants are Chairs (or designated senior staff) of Planning Commissions at the national and subnational levels, or equally senior government officials who are responsible for addressing malnutrition for their government.
- Speakers/panelists should be drawn from government ministries, relevant research organizations, civil society, donor organizations, and private sector.
- Additional invitations will go to:
- Policy makers/Politicians
- Civil Society and Nutrition Focused Organizations (SUN, SNV, Nutrition International (NI), GAIN, etc.)
- Donor organizations (DFID, EC, DFAT, USAID, etc.)
- Relevant UN organizations (UNICEF, WFP, WHO, FAO, UNDP)
- International and regional NGOs (SUN, LANSA, GFAR, SAARC, etc.)
- Research institutions (LANSA, IFPRI, etc.)
The food systems in South Asia have been undergoing significant transformation. This transformation in this region poses several challenges. Raising farm incomes and getting farmers integrated in high value chains objective is dependent on the outcomes related to different product attributes comprising quality and food safety.
Ministry of Primary Industries and the Institute of Policy Studies of Sri Lanka in collaboration with the International Food Policy Research Institute are organizing two day conference on Emerging Food Safety & Quality Risks in South Asia: Challenges & opportunities for Sri Lanka on May 8-9, 2017 at the Ministry of Primary Industries Conference Hall, Battaramulla, Sri Lanka.
The aim of the conference is to examine the South Asian food systems comprising rising urban consumption and diversification in production and consumption portfolio and the associated growing pressures for policy changes for adoption of more stringent food safety and quality standards.
Over the years economic growth in South Asia has significantly helped in achieving production targets and reducing poverty, but still a lot needs to be achieved. Dominated by small holder farmers, with limited access to markets, high transaction costs, post-harvest losses, and shifting climate change, farmer’s need informative support and policy environment across the four parameters – production, availability, access and affordability to achieve food and nutritional security.
Check out the presentation by Dr. P.K. Joshi on Food and Nutrition Security in South Asia at "National Consultation Workshop on Challenges and Opportunities for Food Security Policies in Sri Lanka" which was jointly organized by Institute of Policy Studies of Sri Lanka (IPS) and International Food Policy Research Institute (IFPRI) from July 16-17, 2015 at Colombo, Sri Lanka.
The main objective of the two-day workshop was to identify the key challenges and opportunities for food security in Sri Lanka and provide the basis for the formation of a successful food security policy framework for the country.
IFPRI and IPS also signed a Memorandum of Understanding (MOU) for a collaborative research on Food Security in South Asia to strengthen research and capacity building. The MoU also aims to facilitate effective management of agricultural resources, by government and poor rural communities in developing countries, and increase the impact of research.