Breakout Session 11: Prospering despite climate change

Paper "Prospering despite climate change" by Camilla Toulmin, IIED. Additional paper by Nahu Senaye Araya, Nyala Insurance, Ethiopia

Paper "Weather Insurance for Farmers: Experience from Ethiopia" by Nahu Senaye Araya

Chair’s remarks and key points:  Elwyn Grainger Jones (IFAD)

Six main points were drawn from this session:

• The enormity of the challenge needs a reality check – what are the consequences of a (gradual or abrupt) four-degree increase in temperature? Developing resilience is not a cure for climate change, as even the most adaptable and resilient farming practices can fall short. Nonetheless, a mixture of measures (including the obligation for OECD countries) are needed to facilitate adaption.

• What does Climate Change mean for rural development? Increased scale and volatility of risk – unpredictable, hard to measure, changing long-term trends, and new sources of risk.

• Although weather-risk insurers thrive on risk – therein lies their business – they do not like unpredictable risk. Unfortunately, the effects of climate change are often unpredictable.

• Market opportunities in carbon sequestration for smallholders include selling carbon and other gas emissions, producing biofuels, and the REDD-Plus initiative. Yet, measuring and monitoring these activities remains difficult, with hidden transaction costs, and potential for land disputes as seen with corporate farming and land evictions. Also, the window of opportunity is closing rapidly: entering climate change negotiations can prove to be very difficult, especially within a crisis environment.

• There is potential for building resilience in various agro-ecological practices, such as diversification, but also in insurance mechanisms, farmland and crop contracts, and the use of social networks.

• Revisit available knowledge to assist smallholder farmers adapt and prosper despite climate change. Conventional science often overlooks indigenous technical knowledge (ITK) - scientists should learn from smallholder farming successes in adaptation techniques, such as the use of indigenous stress-tolerant varieties, and encourage ‘portable knowledge’, e.g. the exchange of genetic materials (gene banks) as current species and varieties become suitable to different climatic zones tomorrow. This applies to extension systems as well, as many extensionists tend to be ‘old school’.

Synthesis of discussion

Starting with climate change itself, what we are facing is an increased intensity of climatic events and profound uncertainty. Minimising the uncertainty will involve devising adaptation techniques, for instance some form of insurance or hedging in terms of management. Concerning the name of this session, some participants warned that the first step is coping with climate change (to sustain families in the face of worsening conditions), then think of prospering.

Discussing carbon markets takes a level of realism since the window of opportunity is quickly closing. There is little hope for continuation of the Kyoto protocol, which will end in 2012. Similarly for any compliance market. Still, there is money for adaptation to climate change (mainly through UNFCCC) and there is opportunity to push for projects which do both adaptation and mitigation, e.g., resilience, biodiversity, and water conservation projects. Although not strictly agricultural projects, there are several Rural Development projects on bioenergy at the local scale, such as methane recovery of livestock systems, which deserve to be looked at for scaling up. Barriers to this opportunity exist, however, namely a limited number of markets (often voluntary) and the prices offered. Too much focus should not be spent on getting the right detailed monitoring, reporting and verification rules (MRV) before pushing these projects through – there is a role for organisations like IFAD jumpstart the processes and refine them later.

Climate change is not a new event, as farmers have been adapting to climatic changes for ages, but it is occurring faster. We need to know its effect on agriculture, particularly on pests and diseases, cropping cycles, and risk and uncertainty. Diversification is central to adaptation; biodiversity is crucial for farming systems to be resilient. Also, many species and varieties that are suitable to a particular agro-ecological zone today might no longer be suitable for that area tomorrow, but rather to a different agro-ecological zone. This makes the cases for effective conservation and facilitated access and sharing of genetic resources (including benefits arising from use of conserved agricultural biodiversity), so that exchange via from gene banks or farmer communities can happen more easily.

Smallholder farmers operate in different climatic areas – the biodiversity of their farming systems are assets that should be further utilised. Many stress-tolerant crop varieties exist in smallholder subsistence farms and would be valuable for seed collection and gene banks. The question is how to develop ‘seed’ as a value chain in these communities – including farmers’ bankable knowledge. In this sense, re-defining smallholder farmers is warranted, bringing in marginal systems, indigenous people, and common property resource systems. The perception of subsistence also has to change, as markets often fail to recognise products coming out of subsistence systems.

Sustainable intensification is highly knowledge-intensive and great institutional support is required for farmers - and perhaps massive institutional reform. Research agendas need to be restructured towards resilience, extension systems need to be turned upside-down. At the centre is the issue of farmer capacity –a whole range of new skills are needed and that starts with education systems, vocational training, and adult education. This goes beyond farmer field schools. This is a massive agenda which has to be done to scale, but it is an agenda that neither governments nor donors are yet focussing on.

Everybody insists on the status quo – keep people in rural areas producing our food. Yet, projected scenarios of the impact of climate change on smallholder farming must take into account mass rural-urban migration, its repercussions and eco-refugees. Should we then invest more in mobile tangible assets like knowledge and skills in anticipation of this?

On the topic of micro-insurance, the discussion mostly focused on technicalities, such as its workability when the whole population is affected by a disaster, the individual farmer’s experience with premiums and payouts, and how to incorporate adaptation strategy. Farming insurance was deemed relevant but only as part of a larger package which would include information, technology, and so on. Prompted by the case of Ethiopia where large tracts of land have been leased out to international investors, a question was raised about territorial responsibility, i.e., would international lessees look into protecting the interests of the population? This is key for increasing production for these companies and would include services like micro-insurance.