Creating positive synergies between risk management and transfer to accelerate food system climate resilience

Abstract

Climate change will significantly impact the future viability and security of food production systems, with increased frequency and intensity of droughts, floods, storms and other extreme climatic events predicted in many regions. In order for food production systems to remain viable and resilient under a changing climate, novel approaches, which integrate risk management (i.e. adaptation) and risk transfer strategies, such as insurance, are required. We argue that the coordinated integration of risk management and risk transfer approaches will support greater resilience of food production systems under climate change. Conversely, if risk management and risk transfer strategies are not carefully integrated, there is potential to undermine adaptive capacity (e.g. insurance subsidies may dissuade farmers from investing in climate adaptation) and ultimately reduce the capacity of food production systems to cope with and recover from the adverse impacts of climate change. Here we propose a resilience-based conceptual framework for integrating risk management and risk transfer strategies along with four key principles, which we believe could underlie their successful integration and thus enhance food production system resilience under climate change. These are as follows: (1) pro-active investments in farmer climate adaptation rather than re-active disaster relief, (2) structuring of government subsidies around insurance and climate disaster relief to incentivise farmer climate adaptation, (3) rewarding farmer efforts towards climate adaptation with cheaper insurance premiums for those farmers that invest resources into climate adaptation and (4) recognising investments in the integration of farm climate adaptation and risk transfer schemes within the broader context of future climate disaster risk management and global food security. Such an integrated investment approach could substantially reduce future economic losses for farmers while also enhancing food security under climate change.

La Vía de Acción 5 para la transformación de los sistemas alimentarios: creación de resiliencia frente a vulnerabilidades, conmociones, impactos y tensiones

“…• Inversiones públicas y privadas, coordinadas en el sector alimentario, centradas en la creación conjunta de soluciones que satisfagan las ambiciones individuales y colectivas para hacer frente a la crisis humana y planetaria (Mushtaq et al, 2020), con una mayor frecuencia e intensidad de sequías, inundaciones, tormentas y otros eventos climáticos extremos previstos en muchas regiones. Son también claves para que los sistemas de producción de alimentos sigan siendo viables y resilientes bajo un clima cambiante, enfoques novedosos, que integrar la gestión de riesgos -es decir, la adaptación-.…”

Designing Subsidy Scheme for Marine Disaster Index Insurance in China

“…Therefore, the Pareto optimal claim payment trigger scheme for MDII under CARA utility should be (18).…”

“…Accordingly, various insurances for disaster risk reduction (i.e., the flood insurance, the storm surge insurance) have emerged around the world [15,16]. Nowadays, insurance is a popular approach used for managing marine disaster-related risks, particularly for low-frequency and high-impact risk events [17,18]. During the development of insurance for managing cataphoric risk, various options for insurance operations are proposed and discussed, such as the mixed public-private system, private responsibility and insurance, and public insurance fund [19].…”

Food security issues: root causes and directions for the future

“…For example, businesses that had previously invested in sustainable processes, rode COVID-19 pandemic with a new appreciation for data, information and networks (Cherrington et al, 2021a(Cherrington et al, , 2021b(Cherrington et al, , 2021c. Conceptual frameworks that integrate sustainable risk management and transfer strategies, can proactively change the status quo, and generate cultural shifts for healthier outcomes (Mushtaq et al, 2020). Government policy must be supportive of businesses in the evolution so that they remain competitive and profitable (Henderson, 2020).…”