Asia-Pacific turns to climate finance and insurance to tackle rising loss and damage in agrifood systems

Across Asia and the Pacific extreme weather events and slow-onset impacts are disrupting food production, damaging infrastructure and undermining rural livelihoods. The region is the most disaster prone in the world, accounting for 47 percent the world’s disaster-related agricultural losses.

These impacts place food security, nutrition and the resilience of farming communities under growing pressure. Countries face unavoidable economic losses from reduced income, costs to repair and replace damaged infrastructure, and non-economic losses affecting culture, knowledge, ecosystems and wellbeing.

Innovative finance can help close the loss and damage gap by supporting better risk information, anticipatory action, climate-resilient recovery, and ecosystem restoration. With new funding opportunities emerging in 2026, countries in the region can strengthen proposals and scale solutions — including agricultural insurance — that protect farmers and safeguard food security.

Developing proposals for loss and damage finance

With the Fund for Responding to Loss and Damage (FRLD) expected to begin disbursing up to USD 250 million in 2026 to developing countries facing the inevitable impacts of climate change, the Asia-Pacific region has an opportunity to address both economic and non-economic losses that extend beyond adaptation.

The Food and Agriculture Organization of the United Nations (FAO) and the United Nations University’s Institute for Environment and Human Security (UNU-EHS) have identified key loss and damage response areas for agri-food systems in the region. These were presented at a recent regional workshop on Loss and Damage from Climate Change in Agri-Food Systems in Manila, the Philippines.

Countries can already start developing information and decision-support systems and conduct non-economic loss and damage assessments to document losses to culture and knowledge, health, and ecosystems. Robust disaster risk management systems can help countries better prepare to face climate change in agrifood systems, along with policies that support people who need to move or adapt because of climate change.

Climate-resilient rehabilitation, transforming agrifood infrastructure, and using nature-based solutions to restore ecosystems can help reduce the impacts of loss and damage when it occurs. Regional cooperation on transboundary climate risks and strengthening institutional capacity in countries to access FRLD funding can help catalyse transformative action.

Insurance solutions for agriculture risk management in Southeast Asia

In a related initiative, the Regional Agriculture Insurance and Sustainable Economies Facility (RAISE) is being developed to strengthen financial resilience against climate shocks in Southeast Asia by combining regional cooperation with market-based solutions. This initiative will address vulnerabilities in agrifood systems by improving how climate risks are managed before shocks occur.

“Strengthening resilience in agriculture requires practical, country-driven solutions that improve how risk is managed across the system,” said Beau Damen, Natural Resources Officer - Climate Change and Climate Finance at FAO's Regional Office for Asia and the Pacific. “Through this collaboration, we aim to help advance a market-driven approach that will strengthen regional integration in managing climate risks to food security, while incentivizing national-level actions to build sustainable and resilient agri-food systems that improve farmers’ livelihoods and leave no one behind.”

Developed by FAO and the Southeast Asia Disaster Risk Insurance Facility (SEADRIF), RAISE will help improve agricultural insurance and provide financial support to SEADRIF members and national insurers through a regional reinsurance facility. It will also link premium subsidies to new investments that strengthen resilience – such as climate-smart agriculture and early warning systems. These efforts will support food security, rural livelihoods, jobs, stronger agricultural value chains, and more efficient public spending on agricultural protection.

“Governments already carry much of the financial burden when agricultural shocks occur—often after the fact and at high cost,” said Benedikt Signer, Executive Director of the SEADRIF Insurance Company. “What stood out in the workshop was the level of alignment across governments, partners, and private sector that a new approach is needed to transform the infrastructure to unlock sustainable market-based solutions at scale.”

The SEADRIF–RAISE concept is being developed under the Green Climate Fund (GCF) Readiness project on agriculture sector readiness in Southeast Asia and implemented by FAO and six participating countries.  The initiative will be developed into a regional programme to support food security and rural livelihoods.