The 21st Century climate challenge

Box 4.4Reducing vulnerability through agriculture in MalawiOne of the ways in which climate shocks create cycles ofdisadvantage is through their impact on agricultural production.When a drought or flood destroys a harvest, the resulting loss ofincome and assets can leave households unable to afford the seed,fertilizer and other inputs needed to restore production the followingyear. Well framed public policy interventions can break the cycle, asdemonstrated by recent experience in Malawi.The 2005 maize harvest in Malawi was one of the worst onrecord. Following successive droughts and fl oods, production fellfrom 1.6 million tonnes in the previous year to 1.2 million tonnes—adecline of 29 percent. Over 5 million people faced food shortages.With rural incomes in free fall, households lacked the resources toinvest in inputs for the 2006 cropping season, raising the spectreof a famine on the scale of that experienced in 2002.Supported by a group of donors, the Government of Malawi putin place a strategy for getting productive inputs into the hands ofsmall-scale farmers. Around 311,000 tonnes of fertilizer and 11,000tonnes of maize seed were sold at subsidized prices. Over 2 millionhouseholds purchased fertilizer at US$7 for 50 kg—less than onethirdof the world price. For distribution, the government usedprivate sector outlets as well as state agencies, enabling farmersto choose their source of supply.Source: Denning and Sachs 2007; DFID 2007.Subsequent harvests showed that this productive inputsprogramme was a moderate success. Good rains and anincrease in the area planted to improved crop varietiesraised productivity and overall output. It is estimated that theprogramme generated an additional 600,000–700,000 tonnes ofmaize in 2007, independent of rainfall variation. The value of thisextra production has been estimated at between US$100 millionand US$160 million, compared with the US$70 million cost ofthe programme. The Malawian economy has also benefi ted froma reduction in food import requirements. And the increasedproduction has generated household income and employmentopportunities.The productive inputs programme is not a stand-alone strategyfor human development. Nor is it a panacea for rural poverty.Far more needs to be done to strengthen the accountability ofgovernment, tackle deep-seated inequalities and increase thelevel of investment in basic service provision for the poor. Theprogramme will have to be retained for several years if it is to breakthe cycle of low productivity that affl icts Malawian agriculture.Nevertheless, the country’s experience underlines the role thatpublic policies can play in reducing vulnerability to climate risk bycreating an enabling environment for poverty reduction.4Adapting to the inevitable: national action and international cooperationunaffordable. Risk pooling and insurancearrangements also suffer from a range ofagency problems. The verification of loss,especially in remote rural areas, and the creationof perverse incentives (such as declaringa loss rather than harvesting if crop pricesare low) are two examples. To some degree,these problems can be addressed throughweather-indexing (box 4.5). Public policiescan also help vulnerable people create andmanage their own schemes for coping withpotentially catastrophic risks. When the2001 Gujarat earthquake hit India, only2 percent of those affected had insurance.Low insurance coverage increased vulnerabilityand hindered economic recovery.One positive outcome was the creation ofa micro-insurance scheme for the poorsupported by NGOs and the businesscommunity. The Afat Vimo scheme underthe Regional Risk Transfer Initiative nowcovers 5,000 low-income families against 19different types of disasters, with premiumsof around US$5 a year. This exercise demonstratesthe potential for risk-spreading acrossgeographic locations even in areas marked byhigh levels of poverty and vulnerability. 48Institutions for disaster risk managementDisaster risk management is an integralpart of adaptation planning. Exposure torisk is a function not only of past humandevelopment but also of current public policyand institutional capacity. Not every floodor storm produces a climate disaster—andthe same event can produce very differentoutcomes in different countries.In 2004, the Dominican Republic andHaiti were simultaneously struck by HurricaneJeanne. In the Dominican Republic, some2 million people were affected and a majortown was almost destroyed, but there werejust 23 deaths and recovery was relativelyswift. In Haiti, over 2,000 people were killedin the town of Gonaives alone. And tens ofthousands were left trapped in a downwardspiral of poverty.The contrasting impacts were not theproduct of meteorology. In Haiti, a cycle ofpoverty and environmental destruction has182 HUMAN DEVELOPMENT REPORT 2007/2008