UNDP’s Financial Resilience in Agriculture (FRA) Initiative, focused on building smallholder farmers’ resilience and adaptation to climate change, will launch and convene a Community of Practice for governments in Goa, India 23-24 April.
The Insurance, Climate, Agri-food System Nexus
The world's agrifood system is profoundly impacted by the climate crisis, yet only a fraction of climate finance flows to building the resilience of agrifood systems and smallholder farmers.
This lack of financing is slowing down urgently needed adoption of climate adaptation measures by smallholder farmers, such as the cultivation of high-yield and drought-tolerant seeds varieties or soil and water conservation practices.
Insurance and risk finance instruments have huge potential to de-risk the agriculture sector and attract financing for climate adaptation. To fulfil this promise, governments have a critical role to play in developing scalable and sustainable business models and inclusive markets.
UNDP’s Financial Resilience in Agriculture Initiative
Financial Resilience in Agriculture (FRA) is a new initiative led by UNDP's Insurance and Risk Finance Facility and funded by the Bill and Melinda Gates Foundation. It will be officially launched in September 2024, but has commenced working with public and private partners in 5 core countries - India, Bangladesh, Ethiopia, Tanzania and Uganda.
Through the design and implementation of innovative national agricultural insurance programs, FRA aims to bolster smallholder farmers’ financial resilience and accelerate the pace of adaptation to climate change.
The initiative’s unique market systems approach is to address market failures that prevented agricultural insurance programmes from reaching scale and focus on building sustainable business models for actors from the inclusive insurance ecosystem. To achieve this, the work is guided by three building blocks considered foundational to developing well-functioning agricultural insurance markets:
1) Enabling Environment
2) Market Foundations, and
3) Innovation Models.
Community of Practice (CoP) of Agricultural Insurance Programs for Climate Adaptation and Financial Resilience
The FRA Community of Practice (CoP) provides an important peer-to-peer learning platform for government officials who are currently designing and implementing national agricultural insurance programs for smallholder farmers.
CoP participants include government officials from Ministries of Finance, Agriculture, and Environment, as well as Insurance Regulatory Authorities leading their countries’ agricultural insurance agenda. The 5 core FRA countries will be represented, as well as additional countries with interest in future programming and countries with strong lessons to share.
Within the CoP, innovative approaches to strengthening the role of governments in creating an enabling environment for scalable insurance solutions and business models for insurance industry will be explored and exchanged. These approaches prioritize farmers' needs, strengthen market structures, and enhance local technical capabilities to scale up agricultural insurance solutions.
The FRA CoP will be formally launched at the International Conference on Agriculture Insurance and Agri-Financing: Models and Best Practices Across the Globe and the 1st Convening of the Community of Practice (CoP) workshop on Scaling up national agricultural insurance programmes for climate adaptation and financial resilience hosted by Government of India in Goa, India on the 23rd and 24th April 2024.
Lessons, technical discussions and peer learning will be shared by CoP members, summarized and published to facilitate broader knowledge sharing and advocacy – sign up to the IRFF newsletter to stay updated.