A new United Nations-supported scheme seeks to provide financial support to poor rural farmers facing the impact of climate change and natural disasters.
The UN World Food Programme (WFP) and the UN International Fund for Agricultural Development (IFAD) have joined forces with the Bill and Melinda Gates Foundation for the $1 million initiative.
“Poor people in rural areas are vulnerable to the harsh effects of natural hazards, such as drought and floods,” said Ulrich Hess, WFP’s Chief of Risk Reduction and Disaster Mitigation Policy, who is also the team leader of the project.
“Weather index-based insurance can dramatically improve their ability to predict and cope with the impact of severe weather events exacerbated by climate change,” he added.
Natural disasters and extreme weather events can perpetuate poverty cycles for poor farmers, while droughts and flooding can thwart development and drain countries’ financial resources.
Three quarters of all of the world’s people living on less than $1 a day live in rural areas of developing countries. Most of them rely on agriculture for their livelihoods, but do not have the financial capacity to withstand natural hazards.
The programme’s funds will be put towards assessing other insurance schemes and determining how to boost access to them.
“Affordable insurance can help improve the livelihoods of poor, rural smallholders by enabling them to protect themselves and their financial security, in the event of a crisis,” said Kevin Cleaver, Assistant President of IFAD’s Programme Management Department.
Insurance programmes have been successfully rolled out in countries including Ethiopia, Malawi, Nicaragua, Honduras and India.