Reducing Farmers’ Vulnerability

The yield observation data as well as the yield forecasts can be used to better target food security programmes in those areas that are most likely to be affected by damaged crops. It also forms the basis for insurance companies to be able to monitor crop losses in a transparent and reliable manner, providing the basis to make crop insurance for rice smallholders viable.

  • What are the advantages of using insurance as a means for disaster risk financing?

    The current donor-appeal-based approach is both lengthy and lacks transparency. The distribution of financial aid to affected communities after a disaster can be arbitrary and the payout-process is often little transparent. RIICE can help governments to institute an insurance mechanism that reduces the vulnerability of rice smallholders from natural catastrophes as the adjacent graph explains. Through an insurance mechanism, governments transfer their farmers' risks to the insurance sector and are hence unblocking funds which can be put to more productive use rather than holding them as a contingency in government accounts.

  • Will climate change exacerbate crop risks?

    A major cause for food insecurity is climate change which is being seen as having adverse effects on rice growers in Asia that are henceforth exposed to higher infrequency and higher severity of natural catastrophes. Their need for protection against these perils has risen in order to ensure that they can continue to exercise their profession and can overcome the financial losses of a natural catastrophe leading to yield losses which in turn endangers their credit worthiness. Crop insurance is henceforth an important income stabilisation programme.

  • How will insurance reach smallholders?

    Rural banks and cooperatives are acting as an aggregator for crop insurance services and reach out to farmers on behalf of primary insurance companies that offer a crop insurance cover.

  • What are farmers' needs and risks?

    Farmers' needs:



    Farmers' risks:



    Data provided by GIZ Philippines, 2010

  • What are the income patterns of smallholders?


    Farmers' income:


    Farmers' expenses: