Currently showing: Food security > Farming


30 Jan 14 09:37

As part of the Swiss Re delegation at WEF Davos last week, I made a point of signing the UN Zero Hunger Challenge, committing to work actively to eradicate hunger in the world. http://www.un.org/en/zerohunger/

Having lived and worked in Asia and Africa, this is not just very close to my heart, it is also one of the goals I have set myself as Chairman of Swiss Re's Global Partnerships.

A few minutes after signing up for Zero Hunger, I joined a panel launching the African Risk Capacity (ARC), a specialised agency of the African Union to set up insurance for Sovereign Disaster Risk Solutions, focusing on the cost of drought in Africa. http://www.africanriskcapacity.org/about/arcsecretariat

Africa is a continent which, perhaps more than any other part of the world, is suffering from the impact of global warming. By 2020, it is forecast that between 75 and 250 million people in Africa will be exposed to increased water stress due to climate change. Over the same period in some African countries, yields from rain-fed agriculture could be reduced by up to 50%. Concurrently, the population is projected to rise by 25%.

In many African countries, these factors are likely to severely compromise agricultural production, including access to food. It goes without saying that this threat will adversely affect food security and exacerbate malnutrition further.

I believe the ARC could turn the tables on this bleak scenario, and become a real game-changer for Africa. And this is not just because I work with risk management strategies for a living. Sovereign risk management provides several African nations with a means to pool their risks and resources, and so channel funds to where they are needed, when they are needed. This approach will help ease pressure on government funds in the case of a catastrophic event, and at the same time support investor confidence in the countries subscribing to ARC.

These days, food security is treated very much as a global concern. But the truth is, the issue of food security is exceedingly localised. So what we need to do is help every farmer stay on the farm and continue to make a living and, over time, build a business to create the first seeds of wealth.

That's why microinsurance programmes, such as R4 (The Rural Resilience) pilot that Swiss Re is partnering in Ethiopia and Senegal, or Kilimo Salama in Kenya, are real life lines. But we also need to help governments help their people and secure the economy when disaster strikes. This is where sovereign risk pools – like ARC – can make a difference.

By establishing an effective "top down – bottom up" strategy to enable food security, we also contribute to supporting real economic growth in Africa. It's the combination of sovereign risk pools and effective micro-insurance programmes for farmers that will drive this development.

Besides ARC, another important partnership, catalysed in June 2011, is Grow Africa. This is a regional partnership co-convened by the African Union, the New Partnership for Africa’s Development (NEPAD) and the World Economic Forum, to accelerate investments for sustainable growth in African agriculture.

So far, Grow Africa has mobilised over US $5 billion in investment commitments in nine countries, executed in alignment with national plans, and building partnerships around shared goals and commitments.

Ultimately it's all about collaboration, about working in partnership - across regions, countries and continents - to ensure we can build an equitable, sustainable future for us all on the road to a 9 billion world population.

As a final word: If you have not already done so, I encourage you to watch Swiss Re's video (see above) on partnering for food security. It outlines challenges and solutions to food security in a very compelling way!


Category: Food security: Farming, Climate/natural disasters: Climate change

Location: Africa


7 Comments

Rolf - 13 Feb 2014, 6:11 p.m.

Thanks, Martyn, for your blog on this important topic. Africa remains a continent of contrasts. Above 5 % economic growth over the last few years. But at the same time still the one region in the world where, as you point out, hunger is a major challenge while state collapse remains a regular occurrence: see current events in South Sudan and the Central African Republic, see the French intervention in Mali last year, see the fragile peace in the Democratic Republic of Congo, see the recent attack by several hundred Boko Haram extremists on the Nigerian town of Konduga (http://tinyurl.com/qdrzyh6 ). The Neue Zürcher Zeitung, German-speaking Switzerland's premier paper, had a very good commentary on these African contrasts on 8 Feb (in German only though) (http://tinyurl.com/oophtnu). State capability, or more specifically, the right state capabilities remain the key challenge to long-term African growth and prosperity. The initiatives you highlight are trying to address this challenge, one way or another, directly or indirectly. Without better state capability, and stronger society resilience, Africa's current growth phase will be only temporary, as the 'African boom' of the 1960s was.

Ebrima Balajo - 18 Feb 2014, 11:19 a.m.

I want to bring you to Thomas Malthus population theory and why and how it got falsified. He was arguing that the world population was growing at such a rate that there will come a time when the food supplied will not be sufficient for man. This theory at that time made sense and it cause scientist to work on producing machinery that will fasten the food production, cultivation of of great plains and shortening the harvest for crops (green revolution). Malthus did not put into consideration the impact of factors of production on food production. Similar principle is application here too
I will make similar comment as I did on Juerg Trueb's blog "providing food and energy for the future". I think there are enough food produced for the growing population though with numerous risk ahead. The food production is not done where it is most need due to lack of efficient factors of production in these regions. Efficient factors of production, I mean high tech agricultural equipment. And the global food distribution disparity extremely high. Productivity is a measure of output to input. Higher productivity can be a catalyst to development.
Lets take example of Gambian farmers and Swiss Farmers. Gambia's partial factor productivity (PFP) on land area is almost equal to that of Swiss farmer PFP. Despite, Swiss farmer's total productivity is far higher than Gambia farmer's total productivity. This difference is due to difference in labour productivity (ratio of output to total number of hours worked). One Swiss farmer's Labour productivity can be equated to 50 Gambian farmers labour productivity (aggregate). One of the reasons due to efficient factors of production Swiss farmers has and compared to Gambian farmers. A single Swiss farmer will own a minimum of two tractors plus all necessary equipment to operate the tractor while in Gambia, a tractor will be for a whole village (more than 100 farmers) with only a ploughing machine.I believe If the necessary and required equipments are made available to these farmers who are basically working manually, it will help a long way in producing sufficient food for the population. On one hand, this will create market for the technology developers and on the other hand enable production of food where it is most needed.

Ebrima Balajo - 18 Feb 2014, 11:20 a.m.

The risk of not getting enough rain for cultivation of crops in some parts of Africa is increasing. The irrigation system could be a possible approach to mitigate this risk. To reduce the running cost of the irrigation, renewable energy like solar can be use to run the irrigation machines.
I believe many parts of Africa are capable of producing food all the year around as long as the crops gets water. The weather is quite conducive for cultivation through out the year, its just a matter of changing from rain to irrigation. During the rainy season, rain water can be used for cultivation and during the dry season, irrigation from river, lakes etc.The Gambia for example in the 1970s and 1980s barely imports rice (rice is the main food in most parts of Africa). In the rainy season, farmers use rain water and in the dry season, irrigation machines are used to pump water in the fields. There was continuous food production in the country.

Ebrima Balajo - 18 Feb 2014, 12:17 p.m.

Diversification of Agriculture will not only help in providing food for the future but also diversify source of economic growth in this places.Let us have a look at Norway before the country discovered oil. Its economic boom was due the country's high productivity in agriculture. The adoption of new technologies and substitution from arable to life-stock production made labour productivity grew by 150%. http://www.norges-bank.no/Upload/HMS/PDF/HMSI_chapter6.pdf
Gambia and Senegal for example has huge fishing potential. The problem therein is the poor storage facility and transportation to areas where fish has higher value. A possible solution to this is providing these countries with fishing trawlers that put the fish in tins before coming on shore. The trawlers coming on shore, the fish-tins will be exported to land-lock countries where fish is scares. This will solve the storage problem and provide fish to areas where fish is scares (most needed). The tension on arable agriculture will reduce and encourage forestation. It will also help a long way solving the malnutrition problem.

Jennifer Rodney - 20 Feb 2014, 12:09 p.m.

Ebrima, thanks so much for your comments. You make excellent points about efficiency and the impact of technology. You may be interested in the comment about Africa's potential yield from food and agriculture strategist Christophe Pelletier: https://openminds.swissre.com/stories/554/#c892

Martyn Parker - 27 Feb 2014, 10:54 a.m.

Ebrima,

Many thanks for your insightful comments. I fully agree with your argument that global food security in all likelihood can be managed by improving production efficiency in many exposed or vulnerable regions.

For your background, Swiss Re has been present in Africa for approximately 60 years. We've actively worked on building an agricultural insurance market since the early 1990s. Agricultural insurance not only allows farmers to protect their crops against weather related impacts; it also helps them to become more efficient and resilient over time by covering their credit lines, enabling them to buy better tools and equipment, improve farming methods and connect to markets.

Building agricultural insurance for small-holders in Africa has prompted us to explore new insurance models for customers and providers in a completely new environment.

We have, for instance, committed to providing 1.4 million small-holders in Africa with crop insurance cover (http://ow.ly/u34hY) by the end of 2017. From 2012 to 2013 we increased the number of small holder farmers covered from 175'000 to about 300'000. Thanks to crop micro-insurance schemes many of these farmers now have access to credit, which in turn can help them improve their productivity. For these projects we work in partnership with organisations such as Oxfam and the World Food Program in Ethiopia and Senegal (The Rural Resilience Initiative, R4 http://ow.ly/u34Bu), and the Syngenta Foundation's Kilimo Salama (http://ow.ly/u34DR) in Kenya and Rwanda.

Risk management and insurance are recognised as effective enablers of economic progress and growth. But for an insurance market to thrive and become economically sustainable without subsidies or other forms of support, it needs to reach a minimum size of USD 150 million in terms of premium value. It must also be demand driven.

Creating such a market is a big undertaking that no single actor can manage alone. Achieving sustainable economic progress requires involvement at ALL levels. This is where projects like the WEF's New Vision for Agriculture; Grow Africa; initiatives through the G8, G20 - and indeed the African Risk Capacity (ARC), play a key role. These projects enable collaboration - with governments, 'like-minded partners', communities and individuals - that help plant the seeds of economic success for Africa.

Ultimately it's as much about small successes as big strides. Take the example of Mary Wanjiku Ihugo, a seed farmer in Kenya who participates in the Kilimo Salama initiative. She told us the rapid payout she received in the wake of a severe drought quickly enabled her to replant and reap a successful harvest - despite the climactic challenges in the region.

Finding ways of helping farmers to stay on their farms and develop them into a commercially viable business propositions is a necessity that will benefit us all! Not just in Africa, but all over the world, as we head toward the 9 billion mark!

Ebrima Balajo - 28 Feb 2014, 12:58 p.m.

Thank you for clarifying what swissre in partnership with other organisations are doing in Africa. The information is very helpful to me.
I am sure how farmer react to insurance concept. Insurance providers use to face difficult challenges to make farmers understand insurance concept. If the situation is still the same or similar, I guess a massive awareness campaign might be needed to be able to meet 2017 goal


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