The development of risk management policies, strategies and instruments for agriculture is a task that must be undertaken by all countries in the Americas. Although some progress has been achieved in this area over the past few years, much remains to be done in order to face the negative effects of climate change, which affect agricultural sustainability and production.
In light of this situation, producers must prepare to manage risks that impact production, and which are related to climatic effects such as drought, excess water, hurricanes and hail. Some of these effects can even reach disastrous levels, thus generating considerable production and economic losses in rural territories.
This implies a greater degree of vulnerability for agricultural production, especially family farming, given that most family farmers do not possess a prevention strategy and lack access to the risk management tools available in their countries.
Risk management efforts in the Americas have generally focused on response and rehabilitation actions in the aftermath of adverse climatic phenomena. These emergency response tools, which seek to revert complex situations, are necessary, but have proven to be insufficient.
An adequate risk management strategy must therefore adopt a comprehensive vison that allows for developing prevention, mitigation and risk transfer instruments. This holistic vision must involve all public and private stakeholders who promote risk management tools, fostering their coordinated work based on a concerted strategy.
Adequate management of agricultural risks will not prevent future natural disasters; it will, however, allow for mitigating production and economic losses, managing risks and generating the necessary tools to overcome similar situations in the future.
A number of risk management tools are necessary. With respect to prevention, it is important to guarantee the timely management and availability of information through early warning systems or systems that provide agricultural and meteorological information. The availability of these instruments plays a key role in risk management.
With respect to mitigation, particularly in family farming, technological innovations are necessary; this includes, among other things, the application of digital technology, capacity-building programs on good agricultural practices, and infrastructure to support production.
It is also advisable to develop an agricultural insurance system to serve as a risk transfer tool in which the public and private sectors play an important role. The public sector should be responsible for generating policies to develop the insurance market; the private sector, on the other hand, should participate through insurance and reinsurer companies that develop and offer agricultural insurance products.
It is worth noting, however, that adequate risk management is not solely dependent on agricultural insurance, which must be complemented by the abovementioned prevention and mitigation tools as part of a comprehensive approach.
It is also important to highlight the correlation between risk management and access to funding for agriculture. The possibility of farmers accessing credit opportunities will increase insofar as institutions, and producers in particular, improve risk management. Farmers who possess mitigation tools and agricultural insurance are able to obtain other financial tools with greater ease.
The Americas certainly face significant challenges. The region must undertake the task of fostering risk management in agriculture within the framework of a comprehensive vision for the prevention, mitigation and transfer of risks. This, in turn, will allow for increasing the resilience of agriculture and family farming in particular.
The effects of climate change can generate high levels of vulnerability, significant economic losses and environmental damages that threaten agricultural sustainability in the countries.
As an international technical cooperation organization, IICA, along with other entities−including financial cooperation agencies−must prioritize this issue in their respective agendas, and seek to foster the public policies required to manage the risks that threaten production and food security in the region.
Marcelo Núñez Rojas, IICA Representative in Nicaragua