Risk Management, Insurance And Finance
High Exposure To Climate Risks & Low Capacity To Cope
There are 805 million hungry people in the world. The large majority live in rural villages in Asia and Africa and depend on agriculture for their livelihoods. They very often live in degraded, fragile, and shock-prone environments, with an alarming low asset-base. These populations face continued threats to their food security. Environmental degradation, resource scarcity, climate change and price volatility, together with other risks, make food and nutrition security a hard goal to accomplish.
Linking Safety Nets With Innovative Tools
Addressing these challenges at scale needs a strategic approach integrating tested instruments in innovative ways. This is why WFP is working to link its traditional safety net activities with a more comprehensive set of tools including disaster risk management, risk transfer, and financial inclusion:
- Disaster risk management includes the creation of assets to improve the natural resource base of households, which decrease the impact of climate shocks and increase people’s production, income and livelihoods.
- Transferring risks through tools like insurance, as well as government-managed contingency finance instruments, reduces uncertainty. It allows the poorest and most vulnerable farmers to make investments that increase their productivity. With the protection of insurance, when an adverse event such as a drought or flood hits, farmers receive automatic insurance pay-outs, so that they do not have to take desperate measures such as selling off livestock, tools or other productive assets to survive, or taking their children out of school.
- Improving access to financial services, including both microcredit and savings, enables households to build a stronger financial base to invest in productive assets, as well as in seeds, fertilizers and new technologies to increase their agricultural productivity and livelihoods, ultimately making them more food secure and resilient.
WFP’s Work On Risk Management, Insurance and Finance
A facility to trigger action before climatic shocks occur and to provide predictable multi-year funding for post-climate disaster resilience.
Building climate change adaptation and resilience into safety nets.
Early warning and action for drought risk management.
In collaboration with a wide range of partners, P4P works to improve smallholder farmers’ agricultural production and supports them to participate in formal markets.
A joint initiative by WFP & IFAD to reduce smallholders’ vulnerability to weather and other risks that limit agricultural production and food security.