Central American Farmers Face Climate Change Without Insurance

Alberto Flores (center) works hard to harvest the few bunches of plantains that he managed to salvage from his plantation, which was flooded and ruined after the rains that hit El Salvador in mid-October. He estimates his losses at 2,000 dollars. And in August he lost his maize crop, to drought. Credit: Edgardo Ayala/IPS

Alberto Flores (center) works hard to harvest the few bunches of
plantains that he managed to salvage from his plantation, which was
flooded and ruined after the rains that hit El Salvador in
mid-October. He estimates his losses at 2,000 dollars. And in
August he lost his maize crop, to drought. Credit: Edgardo
Ayala/IPS

By Edgardo Ayala
SAN SALVADOR, Nov 2 2018 (IPS)

Disconsolate, Alberto Flores piles up on the edge of a road the
few bunches of plantains that he managed to save from a crop
spoiled by heavy rains that completely flooded his farm in central
El Salvador.

“Everything was lost, I have been cutting what can be
salvaged, standing in water up to my knees,” said Flores, a
54-year-old peasant farmer from San Marcos Jiboa, a village in the
municipality of San Luis Talpa, in the south-central department of
La Paz.

Flores told IPS that as a result of the rains, which hit El
Salvador and the rest of Central America in mid-October, he lost
some 2,000 dollars, after nearly a hectare of his plantain (cooking
bananas) crop was flooded.”We must consider the protection of
agriculture and how that improves food security, and to this end we
must work on prevention measures that make productive systems more
resilient and that generate sustainable development.” — Mariano
Peñate

San Marcos Jiboa is a rural community of 250 families, 90
percent of whom are dedicated to agriculture. Most of the local
farming families were affected by the torrential rains, IPS found
during a tour of the area.

The damage was mainly to chili peppers, maize, beans, bananas,
pipián – similar to zucchini – and loroco (Fernaldia
pandurata), a creeper whose flower is edible and widely used in the
local diet.

Other parts of the country and the Central American region were
also hit hard.

Central America has been described in reports by international
organisations as one of the planet’s most vulnerable regions to
the onslaught of climate change.

And yet, tools that help farmers mitigate weather shocks, such
as agricultural insurance, are not widely available in Central
America, although important initiatives have been launched.

“I’ve heard about agricultural insurance, but no one comes
to explain what it’s about,” said Flores, who perspires heavily
as he piles up clusters of green plantains.

Compared to Mexico or countries in South America, Central
America has made little progress in this area, according to the
report
Agricultural Insurance in the Americas
, published in 2015 by
the Inter-American Institute for
Cooperation on Agriculture
(IICA).

The report states that the efforts made in the region have not
generated the expected results, although it cites a growth in
agricultural insurance premiums in Guatemala, where they totalled
2.25 million dollars, followed by Panama (1.8 million) and Costa
Rica (just over 500,000 dollars), according to data from 2013.

Experts pointed out that the high cost of agricultural insurance
premiums, which is about 13 percent of an agricultural loan or
investment, is one of the reasons, as well as a lack of information
on and culture of using insurance.

Rows of banana plants on a farm flooded by heavy rains in the village of San Marcos Jiboa, in the central Salvadoran municipality of San Luis Talpa. The rains that hit Central America in mid-October not only impacted crops but also left 38 dead and more than 200,000 people affected in the region. Credit: Edgardo Ayala/IPS

Rows of banana plants on a farm flooded by heavy rains in the
village of San Marcos Jiboa, in the central Salvadoran municipality
of San Luis Talpa. The rains that hit Central America in
mid-October not only impacted crops but also left 38 dead and more
than 200,000 people affected in the region. Credit: Edgardo
Ayala/IPS

“Basically, it’s expensive,” Saúl Ortiz, Guate
Invierte’s Risk Analysis and Management Coordinator, told IPS by
telephone from Guatemala. The financial institution manages a trust
fund of more than 70 million dollars in agricultural support in
various areas, including insurance.

It is precisely because of these costs that Guate Invierte
emerged in 2005, added Ortiz, to support the country’s small and
medium producers and give them the chance to take out a policy. The
initial plan was to extend it throughout the region.

In addition to being a state guarantor of agricultural credits
acquired by farmers from other financial institutions, Guate
Invierte offered insurance not linked to loans, with a subsidy of
up to 70 percent of the cost of the premium.

Climate impact

“Climate change definitely has consequences for production and for
people’s livelihoods, especially those who depend on agriculture,”
FAO consultant in El Salvador Mariano Peñate told IPS.

The soil is deteriorating and the livelihoods, especially of the
poor, are being hit hard because of the impact on the yields of
their small-scale crops, and indirectly, due to the reduction of
employment, he said.

That affects food security, he added, not only of the population
affected by these climatic phenomena, but also of the people who
depend on the crops grown in the affected areas.

“We must consider the protection of agriculture and how that
improves food security, and to this end we must work on prevention
measures that make productive systems more resilient and that
generate sustainable development,” he said.

But that scheme failed because the government stopped injecting
funds, and in 2015 Guate Invierte ceased to offer subsidised
insurance not linked to loans, although it maintains coverage for
customers who do have loans.

In El Salvador, while there is not a consolidated market, one
kind of policy aimed at small farmers has begun to operate.

In July, Seguros
Futuro
, together with the state-run Agricultural Development
Bank, launched the Produce Seguro programme, with coverage for
earthquakes, droughts and excessive rainfall.

It is a microinsurance scheme aimed at the bank’s portfolio of
50,000 clients, whether they are farmers or involved in other
productive sectors.

Unlike traditional insurance policies, which in the event of a
catastrophe only pay for physically verified crop losses, Produce
Seguro offers “parametric” insurance.

This kind of insurance pays a set amount for a specific event,
based on the magnitude of the disaster, such as an earthquake or
flooding, as measured y satellite and other advanced technology
which indicates, for example, the level of rainfall in a given
area.

The higher the level of rainfall in the policyholder’s area,
the higher the indemnity.

In the case of rainfall, the initial level is 136 mm of water
accumulated over three days. The information comes from the U.S.
National Aeronautics and Space Administration (NASA) and the
Salvadoran Ministry of Environment and Natural Resources.

“We don’t have to do any verification in the area,
everything is based on the charts,” Daysi Rosales, general
manager of Seguros Futuro, told IPS.

The pilot programme is supported by Swiss Re, the Swiss
reinsurance company. The cost of premiums is five percent of the
credit contracted with the BFA, which is affordable to farmers.

As a result of the last downpours, “the parameters have
already been met and some level of compensation will be made,
although we haven’t paid yet because the event just occurred and
we are processing the payments,” said Rosales.

Rosales and Ortiz concur that state participation has been key
to the expansion of agricultural insurance in South American
countries or Mexico, something that has not happened in Central
America.

“In Mexico, 90 percent is paid by the State; it is the State
that buys the insurance, not the people,” said Rosales.

Meanwhile, on one of the flooded plots of land in San Marcos
Jiboa, Víctor Alcántara, another farmer who was affected by the
rains, said the impacts of natural disasters are felt virtually
every year in this country, where climate change has become more
severe this century.

“This time the blow was twofold: first we lost our maize in
August, to drought, and now I’ve lost almost my whole loroco crop
because of the rain,” he added.

Alcántara said he had invested 300 dollars in planting loroco,
and has lost 60 percent of the crop due to the heavy rains.

Added to this is the loss of half a hectare of maize, worth
around 400 dollars, due to the drought that affected the area in
August, in the middle of the May to November rainy season, which is
when the two annual harvests take place.

In August, the United Nations Food and Agriculture
Organisation
 and the World Food
Programme
warned in a joint
statement
that the drought would impact the price of food,
since maize and beans, basic to the Central American diet, have
been the most affected crops.

Guatemala, El Salvador and Honduras reported losses of 281,000
hectares of these crops, on which the food security and nutrition
of 2.1 million people depend, the report said.

Now that his maize harvest is ruined, Alcantara said he will
have to figure out how to put tortillas on his family’s
table.

The post
Central American Farmers Face Climate Change Without Insurance

appeared first on Inter Press
Service
.

Source: FS – All – Food and Nutrition Blogs
Central American Farmers Face Climate Change Without Insurance