2013 saw hail hit several European countries. And the year before, there were severe droughts in the US, Russia and Argentina. Even though these events triggered huge harvest losses for farmers at the time, they have since bounced back and the normal agricultural routine has been resumed.
The situation in parts of North Africa could not be more different. There, the 2011 and 2012 droughts have had a devastating and longer-lasting impact. People were obliged to walk for miles to UN aid stations to get food, water and medical attention. The drought literally drove them from their land, in many cases maybe even for good. This was a migration that swelled the number of people living in urban areas where poverty is already a major problem.
These totally contrasting outcomes of what were similar meteorological events were as unacceptable to me in my previous function as head of Swiss Re's Global Partnerships unit as they are today as our company's Group CEO.
For 80% of farmers worldwide, the recurrence of drought, hail, flood or other natural perils will spell disaster. These are the farmers who live in developing countries. So if we want to ensure they are able to continue farming, we need to spread the word about the benefits of insurance.
That said, insurance alone will not be enough. We need the other stakeholders in the agricultural value chain, too.
I refer to governments for the provision of infrastructure, NGOs for knowledge transfer and official development assistance (ODA) programmes for technical assistance. We also need close collaboration between seed and fertilizer companies as well as between the banking and insurance industries. Over time, these alliances will help us develop self-sustaining agriculture.
One initiative that brings all these stakeholders together is the World Economic Forum's (WEF) "New Vision for Agriculture." (http://www.weforum.org/reports/realizing-new-vision-agriculture-roadmap-stakeholders)
I'm impressed by this initiative not only because it brings all partners to the table but also because it has formulated clear goals. My company, for example, has set itself the goal of bringing insurance to up to 1.4 million smallholder farmers in sub-Saharan Africa by 2017.
Another piece of the puzzle will be to take a more proactive approach towards disaster preparedness in high risk communities. Here again, collaboration between diverse stakeholders can support the resilience of local communities, agriculture, and economies of those nations affected by natural disasters. As Filipino senator Bam Aquino shared at WEF this morning, "Nothing could prepare us for Haiyan. We need microinsurance to help people get back on their feet."
To this end, Swiss Re is partnering with the International Committee of the Red Cross (ICRC) to call for the development of integrated risk management practices that can offer countries at risk with practical and functional means to not only recover from disaster, but to invest for long-term growth and development as well.
ICRC president Peter Maurer and I share our thoughts on this initiative in the included video.
Ultimately, my hope for both these initiatives is that they will move us closer to this goal: I want what is normal for farmers in the developed world to be just as be normal for farmers in developing countries. Their livelihoods should be protected by insurance so they can continue farming even if disaster strikes. Making this a reality for 80% of smallholder farmers worldwide is a massive challenge, but one which will also deliver great rewards.
Such initiatives both reduce human tragedy and help replace emergency aid with real self-sustaining development. If existential risks are covered, people can also invest in new businesses. This will generate fresh employment opportunities in areas where currently there are still job shortages. So by making agriculture resilient against natural perils, we are contributing to new opportunities in many parts of the world.
Category: Food security: Farming, Climate/natural disasters: Resilience