Production and transactions risks are pervasive in family agriculture and constitute a major impediment for smallholder farmers in investing in farm technology that will boost quality and quantity of produce, and so enhance access to remunerative markets as well as improve prospects of obtaining formal credit. Not surprisingly, risk mitigation and insurance appears topical in many countries. The research will describe and analyse typical insurance and risk mitigation models, including traditional crop insurance systems; re-insurance systems and government-funded calamity funds as well as micro-insurance systems. Cases to be explored will be from developed as well as developing and will include identifying the conditions that improve supply and assure sustainability of insurance products as well as accessibility for smallholder farmers.
Researchers in NRI and WUR are finalising a four-pager on risk insurance to be delivered end of December 2010. The paper provides a brief summary of the types of risks that smallholder farmers are exposed to: including both pre and post-harvest risks and uncertainties. Also important to include how farming risks and uncertainties impact on the farm household, in terms of farm income and therefore rural poverty and access to credit, etc. It describes typical insurance and risk mitigation models, including traditional crop insurance systems; re-insurance systems and government-funded calamity funds as well as micro-insurance systems. The paper analyses why most of the insurance products are unavailable to smallholder farmers in developing countries. It discusses why these instruments may be effective in markets in the developed countries but generally have been ineffective or inaccessible in developing countries; and it identifies innovative instruments which have been supplied in markets in developing countries and are accessible to smallholder farmers; briefly documenting why they have been successful and what needs to be taken into account in replicating any success.
KENFAP discussed Warehouse Receipt Systems
Edward Kateiya presented a Powerpoint presentation on a study on WRS, Warehouse Receipt Systems(ESFIM case study Report – PRESENTATION at Validation workshop-8.11.2011). The report (ESFIM-Case Studies WRS REPORT-Shared during the validation workshop)was dicussed during a workshop on 8 November 2011.
The study recommend innovative progression simple storage facilities at strategic grain collection and bulking sites at village level to fully fledge WRS. This will promote use of simple technologies such as solar drying and moisture testing meters at the farm level. It is imperative to organize smallholder farmers into association and built their capacity to engage in collective action in management and ownership of collection centers at strategic location in the village level. Price volatility and weather conditions pose a great challenge to the implementation of the WRS hence need for innovative insurance packages to mitigate the above risks. There need for harmonized storage charges and standardization quality requirement to facilitate trading. It is paramount for the government to provide enabling environment through appropriate national policy and legal framework to guide and transact business. Cooperative approach in development of WRS is recommended with a back up of support services and enabling environment.