Conference Agenda

Tackling risk in agriculture

Paul CASTLE, Yuan ZHOU

Syngenta Foundation for Sustainable Agriculture, Basel, Switzerland

Farmers worldwide face a wide variety of risks. These include climate and weather, pests and diseases, and natural catastrophes. These can cause fluctuations in production, which damage livelihoods and contribute to consumer price volatility. The burden of risk is particularly heavy for smallholders in developing countries. However, more solutions are becoming available.

Smallholders and their business partners tackle risks in many ways. More informal approaches include crop diversification and off-farm work; among the formal management mechanisms are agricultural insurance and better use of natural resources and other farm inputs.

Considerable attention currently focuses on risks related to climate. Rising temperatures, erratic rainfall, and severe droughts and floods seriously harm agricultural output and farmers’ livelihoods. Weather-indexed insurance has recently gained considerable popularity. “Kilimo Salama” is an insurance product designed specifically for African smallholders. It uses mobile phones and automated weather stations to help keep the insurance affordable and scalable.

Appropriate water management can also mitigate the impacts of climate variability, particularly on rain-fed agriculture in drier areas. On-farm and community measures include rainwater harvesting and advanced irrigation techniques.

Developing country smallholders also face crop losses from pests and disease; as with many other challenges, they share this problem with farmers worldwide. Sustainable modern responses include improved plant breeding, biological controls and Integrated Pest Management. However, not all pests and diseases can always be adequately controlled.

Price volatility affects smallholders both as producers and consumers; many are net buyers of food. Countries have reacted to recent periods of surging food prices in different ways. Some of these methods are more successful than others.

This Parallel Session, hosted by the Syngenta Foundation for Sustainable Agriculture, features a number of approaches to agricultural risk management. Speakers will focus on the above-named topics with specific examples and engage in debate with the audience.

The speakers and their presentation titles are listed below:

• Rose Goslinga: Syngenta Foundation for Sustainable Agriculture

Title: Insuring Kenya smallholders against weather: Kilimo Salama

• Partha DasGupta: Syngenta Foundation for Sustainable Agriculture

Title: Reducing water use in farming: examples from India

• Brion Duffy: Agroscope

Title: Management strategies for invasive plant disease: Fire blight, a global threat to pome fruit production and agro-forestry ecosystems

• John Staatz: Michigan State University

Title: Preventing and dealing with price volatility in West Africa

Insurance for the Rural Smallholder Farmer: Kilimo Salama

Rose GOSLINGA

Syngenta Foundation for Sustainable Agriculture, Switzerland

Weather-related risks like extreme or erratic rains, flood, and drought are some of the greatest challenges that rural smallholder farmers face. These farmers who have farms of five hectares or less in some of the most hard-to-reach parts of the globe are the most adversely affected by weather-related risks. They are also the most difficult to reach via traditional models of risk-management or insurance. The Kilimo Salama team recognized the unique challenge that this segment of the market posed and has built a product that specifically fills this need. Kilimo Salama’s use of technology is the key to our product’s affordability and the model’s scalability. Our 64,000 clients are farmers scattered throughout rural Kenya and Rwanda. By working through agro-vets as well as employing solar-powered weather stations and mobile payments we have dramatically reduced our administrative costs and can offer premiums that millions can finally afford. To reach these rural farmers we work with local agro-vets who sell inputs like seeds and fertilizer to surrounding farms. When a farmer purchases insurance, the agro-vet can register the purchase through a specially-developed mobile application by scanning a quick response code. At the end of each growing season our automated weather stations compare weather indices to the collected weather data, and calculate and send the insurance payout owed to client farmers via automated mobile payments. For example, a farmer can insure a bag of seeds costing the equivalent of $2 for about $.05. In case of a drought, instead of suffering a complete loss, he will receive a mobile payment equivalent to the $2 he paid for the seeds and can begin afresh at the next growing season. This presentation will outline the Kilimo Salama business model, as well as challenges we have faced in developing the product and bringing it to market.

Addressing risks of water stress in farming by smallholders: examples from India

Partha R DAS GUPTA

Syngenta Foundation for Sustainable Agriculture, Switzerland

Water is most vital of all essential elements of agriculture. Only a third of India’s arable land is irrigated. Fluctuations in the monsoon rains endanger crops from drought, submergence, and pests and diseases. This is reflected in year to year fluctuations in production and productivity, particularly in eastern and central India where nearly half of India’s rice crop is grown, mainly rain-fed. Majority of the projects undertaken by Syngenta Foundation in India are situated in these regions. Whereas rice provides food to small and marginal farmers, for cash income they need to grow something of a higher value e.g. vegetables and fruits. Vegetables suit small farmers well and can fetch handsome returns from holdings as small as 1/10th of a hectare, provided the farmer has some access to irrigation. Otherwise, with higher cost of inputs, growing vegetables would be a greater risk than of growing rice. Therefore, as the Foundation embarked on promotion of vegetable cultivation, it also worked towards increasing water resources for irrigation. Farmers’ groups were assisted to harness rainwater and to a lesser extent tapping ground water, using low-cost methods and devices, e.g., rejuvenating community tanks, building low-cost check dams, small rainwater ponds, land shaping, and dug wells. Farmers’ groups were also facilitated to share the use of pumps for lifting water and low-cost drip systems for enhancing water use efficiency. Farmers were also assisted to save crops from diseases and pests using scientific techniques. The paper discusses how these interventions alleviated risks and enabled farmers to successfully grow vegetables and earn decent income from collective marketing of their produce.

Policies for managing volatility in staple food prices in West Africa

John STAATZ, Niama Nango DEMBÉLÉ, Boubacar DIALLO

Michigan State University

Staple food prices in West Africa, in addition to generally following predictable trends and normal seasonal variations, are frequently volatile, characterized by large and unpredictable variations that create serious problems for farmers, traders, processors, consumers, and government. Some of this volatility is “internal”, caused by structural characteristics of staple food production and markets in the region and by unpredictable and frequent changes in national trade policies. Some of the volatility is imported, reflecting the unpredictable variability in international markets, with which the West African markets have become increasingly integrated since the 1990s. Managing this volatility is a large challenge for all actors in the food system. The challenge for national policy makers is compounded by the political need to balance the interests of consumers and other stakeholders in the food system, such as farmers and traders.

This presentation will focus on efforts by West African governments to manage price volatility since the international price spikes of 2007-08. Many of these policies have involved trade restrictions and heavy government subsidies to farmers and to consumers, raising questions about whether such policies are sustainable in the future. Reliance on regional and international markets as food security instruments has been damaged, as countries have tried to increase national food self-sufficiency under the banner of “food sovereignty.” The presentation will review policies undertaken and their impacts on farmers, traders, processors, and consumers. It will also examine some of the options proposed for more effective management of such volatility under the ECOWAS regional Comprehensive Africa Agriculture Development Programme (CAADP) and outline some of the remaining policy changes in dealing with price volatility in the region.