Agrometeorological Risk Management: Workshop Summary and Recommendations

1. Agrometeorological Risk Management: Workshop Summary and Recommendations M.V.K. Sivakumar, WMO R.P. Motha, USDA World Meteorological Organization

2. Presentation • Introduction • Workshop Sessions • Workshop Summary • Recommendations World Meteorological Organization

3. Introduction World Meteorological Organization

4. World Meteorological Organization

5. Developing Countries are Hit the Hardest … World Meteorological Organization

6. Risk and Uncertainty • Risk = chance of something happening that will impact on your objectives • Chance = uncertainty • Uncertainty  Risk • Risk management involves managing uncertainty World Meteorological Organization

7. For decision-making • Risk Assessment: Monitoring defines the nature of the risk • Risk Perception and Choice: Monitoring affects choices • Risk Management: Monitoring leads to alternate strategies Overall:Increased monitoring will reduce the uncertainty and the ambiguity now embedded in the process World Meteorological Organization

9. Risk management strategies…. • Avoid dangers • Prevent/reduce the frequency of impacts • Control/reduce consequences (adaptation measures) • Transfer the risk (e.g. insurance) • Respond appropriately to incidents/accidents (e.g. disaster management) • Recover or rehabilitate asap (e.g. media response) World Meteorological Organization

10. Workshop Sessions • Weather and Climate Risks, Preparedness and Coping Strategies: Overview • Challenges to Coping Strategies with Agrometeorological Risks and Uncertainties – Regional Perspectives • Agrometeorological Risks and Uncertainties – Perspectives for Farm Applications • Coping Strategies with Agrometeorological Risks and Uncertainties • Weather Risk Insurance for Agriculture – A Special Symposium • Coping with Agrometeorological Risks and Uncertainties – Policies and Services World Meteorological Organization

11. Workshop Summary • Risk in agriculture • Risk and risk characterization • Approaches for dealing with risk • Risk coping strategies • Perspectives for farm applications • Challenges to coping strategies World Meteorological Organization

12. Risk in Agriculture • Yield risk • Production risk • Price risk • Income risk • Financial risk • Institutional risk World Meteorological Organization

13. Risk and Risk Characterization • Risk considers not only the potential level of harm arising from an event or condition, but also the likelihood that such harm will occur. • Climate anomalies and extreme climatic events dominate in providing challenges for coping with agrometeorological risks and uncertainties. • Risk has both natural and social components • The risk associated weather and climate for any region is a product of both the region’s exposure to the event (i.e., probability of occurrence at various severity levels) and the vulnerability of society to the event. World Meteorological Organization

14. Poverty and Risk • Extreme poverty makes people very risk averse; producers facing these circumstances often avoid activities that entail significant risk, even though the income gains might be larger than for less risky choices. • This inability to accept and manage risk and accumulate and retain wealth is sometimes referred to as the “the poverty trap”. • In most developing countries, livelihoods are not insured by international insurance/reinsurance providers, capital markets, or even government budgets. • Without access to credit, risk-averse poor farmers are locked in poverty, burdened with old technology, and faced with an inefficient allocation of resources. World Meteorological Organization

15. Agrometeorological Risks and Markets • Agrometeorological risk and uncertainty permeate the entire marketing system with far-reaching consequences. • There are a vast array of risks and uncertainties that directly or indirectly impact the global agricultural marketing system. World Meteorological Organization

16. Approaches to Dealing with Risks • There is a well established approach to characterizing and managing risks and this includes risk scoping, risk characterization and evaluation, risk management and monitoring and review. • Preparedness planning, risk assessments, and improved early warning systems can greatly lessen societal vulnerability to weather and climate risks. • The goal of effective risk management is to impose management and policy changes between hazard events such that the risk associated with the next event is reduced through the implementation of well-formulated policies, plans, and mitigation actions that have been embraced by stakeholders. World Meteorological Organization

17. Approaches to Dealing with Risks • Taking actions to reduce the likelihood of risk event occurring, avoiding the risk, redistributing the risk, and reducing the consequences. • Enterprise diversification, vertical integration, contracting, hedging, liquidity, crop yield insurance, crop revenue insurance and household off-farm employment or investment. • Farmers have many options for managing the risks they face, and most use a combination of strategies and tools. • Weather derivatives and weather index insurance play a role in developing agricultural risk management strategies. World Meteorological Organization

18. Requirements for Management of Risks • Awareness that weather and climate extremes, variability and change will impact on farm operations • Understanding of weather and climate processes, including the causes of climate variability and change • Historical knowledge of weather extremes and climate variability for the location of the farm operations • Analytical tools to describe the weather extremes and climate variability • Forecasting tools or access to early warning and forecast conditions, to give advance notice of likely extreme events and seasonal anomalies • Ability to apply the warnings and forecasts in decision making. World Meteorological Organization

19. Risk Coping Strategies • Operational agrometeorological services eg., use of seasonal forecasts in agriculture, forestry, and land management with strategic relevance to national policy with respect to planning to help alleviate food shortages, coping with drought and desertification etc., • Use of integrated agricultural management, crop simulation models and climate forecast systems to reap the highest benefit. • Minimization of pesticide application through understanding the relationship between meso- and microclimate, and the effects on the cycles of disease agents and prediction of climatic influences • Contingency planning to alleviate the increasing costs of impacts, World Meteorological Organization

20. Coping Strategies (contd.) • Surface irrigation, minor irrigation, steps to reduce excessive groundwater utilization, increased efficiency in the rainfed areas and crop diversification for efficient water use • Technological innovations (direct seeded rice (DSR) cropping system to increase net income) • Local indigenous knowledge (coping mechanisms of farmers to various environmental and natural challenges) • Improved cultural/farming practices (tillage, sequence of cropping, use of crop residues, appropriate soil and water management etc.,) • Optional use of resources (crop and variety diversification) World Meteorological Organization

21. Perspectives for Farm Applications • Proper management of natural resources to sustain agricultural production within specific agro-ecosystems • Combination of locally adapted traditional farming technologies, seasonal weather forecasts and warning/forecast methods may help farmers improve productivity and incomes • Utmost need for “middle level” intermediaries to facilitate two-way guidance between the providers and users of agrometeorological data and services. Lack of resources and skills have prevented significant technological progress in most rural areas of many developing countries. • Establishment of an Emergency Response System (ERS) in agricultural management to be considered as an on-farm application for decision-making support system (DMSS) against agrometeorological risks and uncertainties. World Meteorological Organization

22. Challenges to Coping Strategies • A key challenge is in the combination of the coping strategies and in facing a combination of challenges to each of them. • Impact of the different sources of climate variability and change on extreme events • The strategy of erring on the safe side through over-irrigation, over-protection and over fertilization of crops has been counter productive • Development of well differentiated and sufficiently scaled up operational agromet services supporting preparedness strategies. • Lack of systematic and standardized data collection from disasters. There is no recognized and acceptable international system for disaster-data gathering, verification and storage. World Meteorological Organization

23. Challenges to Coping Strategies (contd.) • Lack of effective communication services in the timely delivery of weather and climate information to enable effective decision making • Weak linkages between farmers and agricultural extension services • Spatially correlated risk, moral hazard, adverse selection, and high administrative costs in agricultural insurance markets • Lack of an enabling environment for effective and efficient insurance markets in developing countries World Meteorological Organization

24. Recommendations • Risk management • Risk management tools • Research needs • Policy issues • Emphasis on user needs • Communication • Marketing World Meteorological Organization

25. Risk Management • Develop a pro-active risk-based management approach to deal with the adverse consequences of weather extremes and climate anomalies which includes risk scoping, risk characterization and evaluation, risk management and monitoring and review. • Emphasize preparedness planning and improved early warning systems to lessen societal vulnerability to weather and climate risks. • Provide accurate, timely, consistent, and widely-available information to optimize decisions relative to the risks and uncertainties within the global agricultural production and distribution system. World Meteorological Organization

26. Risk Management Tools • Use of decision-support systems as risk management tools should be promoted as an effective means of providing output of integrated climate-agronomic information in the form of scenario analyses relating to impending risks that can be valuable to users • For medium and low input systems in the developing countries, crop or agro-ecosystem modeling should be used to guide general decision-making on a higher institutional or farm advising level. • Current and future trends of simulation model outputs should be analysed for sensitivity to climatic hazards of different agricultural systems and defining specific critical thresholds according to farming characteristics in agricultural areas. Based on this, possible modification of crop protection methods, irrigation programs, cultivation techniques, harvesting, storage and commercialisation strategies can be evaluated in conjunction with economic aspects. World Meteorological Organization

27. Risk Management Tools • Risk assessment and risk management models supporting coping strategies for integrated pest management could be used in a prototype conceptual framework that can be utilized in other agricultural-related risk approaches. • Statistical forecasting tools to link observed weather data to crop yields in major crop-producing regions should be developed • Emergency response system (ERS) based on advanced Information Technology (IT) such as information network, simulation models, tools for GIS and remote sensing could be developed to address agricultural hazards and early warning. World Meteorological Organization

28. Risk Management Tools • Climatic risk zoning could be used for quantifying climate-plant relationships and the risk of meteorological extremes in agricultural financing programs. World Meteorological Organization

29. Research Needs • Local indigenous knowledge has been blended with specific and important weather patterns in a cultural tradition in many poor, rural areas. Introducing new scientific-based weather/climate forecast services, which provide accurate and reliable outlooks into this cultural system may help farmers improve yields and cope with risks. • There is an essential need for the development of standards, protocols, and procedures for the international exchange of data, bulletins, and alerts for some types of agricultural hazards. WAMIS offers the potential to assist with this technology transfer. World Meteorological Organization

30. Research Needs • The application of seasonal forecasts for crop management strategies, risk management planning, and national policy implications needs to be considered, as these outlooks become more accurate and reliable. • Developing methods for screening satellite imagery to identify crop-specific impacts of weather in crop regions around the world should be research priority. • For effective management systems to be put into place, integrated climate-crop modeling systems need to be developed at the appropriate farm or regional scale suitable for the decision-makers needs. World Meteorological Organization

31. Policy issues • In many developing countries, the inability of poor in rural areas to gain access to support mechanisms in terms of technical expertise or technological innovations, including formal sources of credit or crop insurance, requires urgent attention. • Agrometeorological services and support systems for agrometeorological services should be strengthened for effective management of weather and climate risks. • Aspects of drought contingency planning, drought preparedness, and drought impact assistance policies need to be urgently considered as to their future effectiveness under long-term climate change. World Meteorological Organization

32. Policy issues • Drought contingency plans on paper should be translated into an effective policy covering the range of activities required to address short and long-term consequences. Effective and interactive management systems need to be set in place. • Public-private partnership models need to be further explored in order to ‘mainstream’ drought risk management. Involving the development of risk management tools and approaches within the context of overall rural livelihood strategies, integrating risk arising from markets and threats to the natural resource base. It also involves communicating risk management knowledge through functional, existing communication networks of farmers and other landholders, rather than pursuing specific communication programs. World Meteorological Organization

33. Policy issues • The concept of a drought mitigation and monitoring center, coordinated by both meteorological and agricultural agencies at national and state levels, to define standards and policy for monitoring and mitigation of drought at both state and national levels should be promoted. • A scientific desertification monitoring and evaluation system involving all appropriate sectors including agriculture, forestry, water conservation, environmental protection, meteorological and natural resource conservation should be established. • Measures to combat desertification must be vigorously pursued. These include: shelterbelts, windbreaks, converting cropland to forests, grazing prohibition, grassland construction, water-saving irrigation project, and integrated ecological agro-forest measures or integrated ecological agro-economic measures. World Meteorological Organization

34. Emphasis on User Needs • Develop clear and useful guidelines on the exact nature of agrometeorological products needed for local user communities • Strengthen the use of intermediaries in training farmers and the use of information technologies fit for target groups. • Implement an effective user-driven delivery system comprising of decision support tools and the training of users on their application at critical decision points in farming. World Meteorological Organization

35. Communication • Communication and dissemination are critical links to the transfer of early warning information to the right decision-makers. For disseminating warnings Internet is an useful medium for expanding coverage and reducing time lags and its active use should be promoted. • Enhancements in communication channels for the improved dissemination of agricultural meteorological information must take into account the literacy levels of users, socio-economic conditions, level of technological development, and accessibility to improved technology and farming systems. • For effective inter-sectoral and multi-stages communication of risk, appropriate involvement of communication pathways and common dialogue between scientists, managers, and communities should be promoted. World Meteorological Organization

36. Communication • A documentation of the many and varied types of management strategies to cope with agrometeorological risks and uncertainties should be posted on WAMIS web server. • Methodologies and tools to assess precipitation anomalies and drought should be posted on the WAMIS web server for potential application elsewhere. • Efficient irrigation water management plays a key role in agricultural productivity and also protects the soil health. Proper and timely agro-advisories related to irrigation scheduling, fertilizer management helps the farmers in better planning of agricultural operations. World Meteorological Organization

37. Marketing • The entire global agricultural economy encounters price, income and other forms of risk related to weather uncertainty. Increased interdisciplinary collaboration between meteorologists, agronomists, and economists can improve the quality of information upon which agriculture-related businesses and agricultural policy-makers around the world depend. World Meteorological Organization

38. Thank you very much for your attention World Meteorological Organization