Climate change is increasing the severity and incidence of extreme weather events. How can policymakers help build farmer resilience to these shocks?
This podcast is the third of a series in collaboration with J-PAL, covering their policy insights which highlight evidence on important topics in development. Read “Building farmers' resilience to climate change,” on J-PAL's website.
Why are small-scale farmers particularly vulnerable to climate change?
Small-scale farmers, who depend on their harvest for their livelihood, are particularly exposed to variations in rainfall or temperature. As a result of climate change, farmers are increasingly exposed to a number of extreme weather events due to rising temperatures and increased rainfall.
In this episode of VoxDevTalks, Tavneet Suri discusses how small-scale farmers respond to extreme weather, often in quite dramatic ways. During recent flooding in East Africa, many farmers cut back on their consumption, sold assets and stopped paying school fees. The rise in incidence of droughts and floods has led to dramatic increases in food insecurity that can be detrimental for people, both young and old.
The timing of rainfall is also changing, affecting when farmers perform certain tasks (planting or harvesting). This feeds into the broader uncertainty that climate change is driving.
How new seed varieties can help build farmer resilience
New seed varieties can help protect crops against floods and droughts. Despite the clear benefits that these technologies have during extreme weather events there were initial concerns about how they may affect yields during normal times. Research now suggests that they may even lead to better yields during periods without extreme weather, as farmers have a greater incentive to invest in other technologies if they know their harvest will be protected during flood or drought periods. The most significant of these complementary investments is labour time. Farmers spend more time planting properly or performing intensive planting.
What makes farmers change their seed types?
Research at J-PAL uses RCTs and so cannot capture the natural technology adoption choices by farmers. Evidence from India, where a technology intervention was scaled-up, suggests that these technologies primarily help farmers in flood prone areas. In high-risk areas, richer farmers are more likely to move out. As a result, flood or drought prone areas are often poorer suggesting that those most exposed to flood risk may be the least able to afford new technologies. Government support through in-kind technology transfers could be one way to tackle this problem.
Part of the research agenda and debate in this area has focused on how to get farmers to take up weather insurance, how to spread information, and whether technology distributors should also provide training for farmers. Other work has emphasised the importance of government policy. If support is not provided ex ante, it is likely the government will have a significant role to play after extreme weather events, which could end up costing more.
How can better information help resilience?
A body of research has studied whether providing more accurate forecasts can help farmers become more resilient. Improvements in forecasting must be matched with ensuring information reaches farmers. Evidence does suggest that this can lead to farmers investing more. However, effects vary significantly by crop and by setting.
How can mobile money and emergency loans make farmers more resilient?
Mobile money mainly involves person-to-person interactions and has enabled money transfers to become cheaper and easier. It can help build farmer resilience as it widens the available social network that farmers can rely on during periods of bad harvest. This is particularly important given the positive correlation between geographical distance and exposure to a shock.
Research suggests that individuals are more likely to take out a loan when something bad happens. However, emergency loans are often small and short-term. Longer-term loans may have larger benefits. Varying the timing of the loan (e.g. at harvest versus earlier) may also matter.
‘Financial tools can help resilience. We don’t have enough work on the credit side, looking at pure resilience. More to be done!’
What are graduation programmes and are they impactful?
Graduation programmes are a bundle of interventions: a large asset, training on the asset, some consumption, some financial inclusion. Research is finding large impacts of these programmes on consumption and welfare. Resilience is also strengthened partly because these programmes help diversify sources of income.
‘It is very hard to move farmers away from farming into something else. It’s not just some stubborn stickiness to farming, let’s be clear. There has to be opportunities in the area that allow you to do that.’
More broadly, diversification of income sources is a positive way to bring about resilience. However, there is limited evidence on how to drive this, especially given limited economic opportunities in many rural areas.
How to spur technology adoption
New technologies, such as fertiliser or improved seed varieties, can help increase yields and protect crops during extreme weather events. However, this does not necessarily guarantee that these investments are profitable. Tavneet Suri points to fertiliser, that despite its potential to improve yields, is often too expensive to be profitable for many farmers. Furthermore, technologies that are profitable in one place may not be in others and highlights the need to understand the benefits and costs of different technologies in different contexts.
Providing a market for insurance
The research on providing insurance does suggest that it can have significant impacts on farmers. Insurance makes farmers more likely to make riskier investments such as starting a business or investing in new technologies. Similar effects have also been found with Universal Basic Income.
However, farmers often do not want to pay for weather insurance given its intrinsic characteristics. Insurance is seen as a form of saving and relies on trust between the farmer and the provider that the insurer will turn up when the money is needed. This differs from loan provision and can explain why it has been difficult to drive insurance take-up in many rural settings.
Climate change in the future
Climate change is already having huge detrimental impacts in the Global South and its impacts are growing. The consequences for governments are dramatic, often faced with severe fiscal issues after crises. Many African countries are struggling with debt and as a result will rely on external support during crisis periods.
‘Given how bad it’s been in the last few years from these devastating events. Given how food insecure parts of the Global South have been. It’s not going to get any better. It’s going to get worse and we’ve been struggling already to deal with that.’