Risk management |
Some differences between developing and
About 40% of the worldwide net plant production (natural vegetation and
agriculture) has been utilized and appropriated by human activities (Skole, 1997),
but only 15% of the world food is traded (Fischer et al., 1996). Only a small
part of agricultural production thus enters commercial channels, which is to
say that the majority of farmers grow their own food.
This is the definition of "subsistence farming". It usually entails
that the production is also low and precarious.
According to UN (1996) figures, the 2000 rural population will be only
24% in developed countries, and 75% in the least developed ones (see note 1).
In developed countries, only a fraction rural population is actually
involved in farming, and the population relies on markets for their
food supply.This is to say that the strategies of farmers, and their
perception of risk, are vastly different: a subsistence farmer aims at
stabilizing his production, while farmers in developed countries aim
essentially at maximizing their economic return.
There are many other differences: developing countries usually make a
clear difference between food crops and cash crops, while all crops in
developed countries are "cash crops". In developing countries, most cash
crops are industrial export crops (coffee, sisal...), and some of them
are grown as an "insurance against good years" (see note 2).
An attempt of a more systematic treatment of the subject is given in Table 1
below. The listed differences entail large differences in strategies.
Some differences between farmers in developed and developing countries
| ||Subsistence farmer||"Developed" farmer|
|Strategy||Stabilize food production||Maximize income|
|Maximum loss||Life and out-migration||Debt and cessation of activity|
|Source of risk||Weather||Weather, markets and policies|
|Non-structural risk avoidance mechanisms||Virtually non existent||
Insurance, credit, legislation|
|Inputs||Very low, with little and slow evolving technology component.||
Very significant; fast evolving (varieties, mechanization, pesticides etc.)|
|Farm assets||Insignificant (some tools)||Very significant|
|Price of food crops||Local : depends mostly on local markets and production. Very steep spatial gradients of prices can be observed in the same country; prices are often government controlled||Global: they depend on national and international markets and production, and on government policies|
|Price of industrial crops||Global to some extend, but government agencies or other buyers are often in a position to pay farmers less than the actual values of their crops||As above, but with much less interference of policies|
|Role of cattle||Banking system, i.e. cash reserve (see note 3); source of animal products for direct consumption, but mostly from small cattle and poultry||Cash production|
Risk management sensu stricto
There is little doubt that one of the main problems facing the individual
farmer in developing and developed countries alike is the unpredictability
of weather at a seasonal scale.
Even under traditional farming conditions with no inputs other than labour,
several management decisions have to be taken: choice of crops and varieties
to be planted either in isolation or mixed, choice of land where there
id sufficient land to chose, choice of planting dates, etc. Subsistence
farmers sometimes make use of bewildering spectrum of traditional varieties,
of which they know and understand the eco-physiological response.
Diversification is thus one of the most basic risk management approaches
used at the subsistence level as well. It should also be stressed that
traditional systems can be very robust because of their low water consumption
(as compared with improved varieties) and low input requirements (fertilizers
too increase water consumption and the risk of agricultural drought!).
It remains that subsistence farmers will be gradually forced out of their
traditional farming, willingly or unwillingly, mainly because of land
shortage, urban demand and general development.
Climate risk management techniques in agriculture can be categorized
as below. All the techniques listed assume that long-term data are
actually available to properly assess the risks and statistically most
efficient response mechanisms.
Structural measures that
reduce the variability of climate resources at plant level
They include irrigation, water harvesting, windbreaks, frost protection,
artificial and controlled climates (greenhouses...), microclimate manipulation...
Most of them entail significant costs that actually require government
participation when they are implemented in developing countries.
Again, most non-structural measures include a cash component that is
non-existent or difficult to implement at the subsistence level. Credit
to farmers, for instance, is still the exception rather than the rule.
Crop insurance can be resorted to only when there is sufficient spatial
variability of the environmental stress (e.g. with hail), but remain
extremely difficult to implement for some of the major risks, such as
drought, which typically affect large areas, sometimes whole countries.
They are certainly not feasible without government intervention. One of
the techniques which have been adopted with credit and insurance is to
make them conditional to the adoption by farmers of improved, risk-reducing
practices, like early planting.
Improved legislation, if it can actually be implemented is probably
one of the measures that has the best potential in the long-run. This
includes watershed protection (for instance by preventing grazing in
some forest areas), and all the measures aiming at improving farming
efficiency under a no-regrets approach. Finally, preparedness plans are
Improved use of climate
knowledge and technology
This includes the development of monitoring systems and response mechanisms
to current weather, both at farm and government level. Under technology
we include mainly the modelling of future impacts based on current
weather (within season), and decision tools of varying complexity.
In practice, the decision tools are tables/flow-charts or software that
assist farm-level management decision-making based three types of inputs:
- the knowledge of local environmental/agricultural
conditions (reference data; see note 4);
- the measurement of local "decision parameters" by
local extension officers or farmer;
- economic considerations, e.g. Cost of inputs Vs
The major challenge facing all crop-weather modelling is the incorporation
of qualitative changes deriving from complex interactions. For instance, the
above-mentioned shortage of land in several countries will entail severe
qualitative changes. Whether the resulting chain of interactions (social
conflicts) can be modelled is rather dubious.
Note 1. The corresponding figures projected for 2030 are 17 and 56 %, respectively.
Note 2. Farmers market a small part of their food crops. During good
years, prices tend to drop, in which case the government still buys
cotton or sisal, thereby ensuring some cash income.
Note 3. This is sometimes referred to as "contemplative herding".
Note 4. A simple example of this could be, for instance, a threshold
of air moisture or sunshine duration to decide on pest risk, or a
threshold of salt content of water to decide on irrigation-salinity
risk. More complex applications require the use of models, which can
usually not be run at the village level but require regular communication
with a central office
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