Assessing and managing agricultural risks in developing countries
Risk and uncertainty are inherent to agriculture. The most common sources of risk are weather, climate, diseases, natural disasters, and market and environmental shocks. Other risks relate to logistics, infrastructure, public policy, the political situation and institutions. Some risks have become more severe in recent years due to climate change and the volatility of food prices.
Smallholder farmers’ livelihoods are especially vulnerable. They may have difficulty in assessing and managing risk, and fail to benefit from investment opportunities that could improve their farming businesses and strengthen household resilience.
Agricultural Risk Management (ARM) is an innovative approach for improving the resilience of vulnerable rural households, and leveraging finance and investment. ARM allows farmers and businesses to be pro-active and increases their capacity to assess, prepare for, absorb and adapt to risks.
The Platform for Agricultural Risk Management (PARM) works to make risk management an integral part of agricultural policy and investment planning.
PARM is a G20 initiative, coordinated by IFAD, and financed by a multi-donor partnership between the European Commission, the French Development Agency, the Italian Development Cooperation, IFAD and the German Cooperation.
The Platform promotes a rigorous and holistic methodology for assessing and managing agricultural risks in developing countries. It presents evidence on risks and provides ARM tools.
It also facilitates dialogue between governments and stakeholders to:
integrate ARM into policies and farm practices; and
boost investment in agriculture.
Launched in 2013, PARM focuses primarily on sub-Saharan Africa. It works in partnership with the New Partnership for Africa’s Development (NEPAD) Agency, and its Comprehensive Africa Agriculture Development Programme (CAADP).
IFAD’s technical assistance programme INSURED (Insurance for rural resilience and economic development) has been building knowledge about how to strengthen women producers’ access to climate risk insurance.