By Francesca Casalini and Jesús Antón, OECD Trade and Agriculture Directorate
As one of the economic sectors most inherently exposed to natural hazards, risk management has always been a key issue for agriculture. During the last few decades, however, the frequency and intensity of natural hazard-induced disasters affecting agriculture have increased dramatically, largely due to climate change.
Powerful typhoons and heavy rains cost Japan’s agriculture more than USD 10 billion in 2018-2019. Hurricane Florence and the Midwest floods each caused agricultural damage and losses of over USD 1 billion in the United States over the same period. More broadly, severe droughts have been the single greatest cause of agricultural production losses across the globe between 2008 and 2018. Natural hazards are only expected to become more frequent and harmful in the future, threatening communities and livelihoods and challenging even the most experienced and innovative farmers.
These trends mean that the “business-as-usual” approach of coping with the impacts of natural hazards cannot continue without undermining agricultural productivity and sustainability. Instead, there is a need to transform agricultural and related policies to move from a coping to a resilience approach. This implies designing policies that better enable stakeholders to plan and prepare for, absorb, and recover from shocks, but crucially, that also support them to better adapt and transform in response to a changing climate – a central goal of this year’s UN Climate Change Conference (COP26) starting next week.
Agricultural policies can play a key role in sending signals to farmers and in motivating them to build resilience to risk. For over a decade, the OECD Committee for Agriculture has been exploring risk management instruments and policies, climate change adaptation, and the management of water risks and animal diseases. The focus of this work has progressively shifted from a risk management to a resilience perspective. Central to this approach is the need for government intervention to focus on catastrophic risks that are rare but cause significant damage to crops and livelihoods, while designing agricultural policies that provide incentives to strengthen the capacity of the sector to prepare for and respond to risks.
Our most recent report, Building Agricultural Resilience to Natural Hazard-induced Disasters, undertaken with the UN FAO in response to a request by the Italian G7 presidency, proposes an approach to building agricultural resilience to natural hazard-induced disasters of the type that climate change is likely to make more frequent and intense in the coming years, based on the following four principles:
Experiences collected from seven country case studies in the report (Chile, Italy, Japan, Namibia, New Zealand, Turkey, and the United States) provide concrete examples of how policies can move from a passive, risk-coping approach to an active strategy focusing on resilience.
For example, in all seven countries, governments are providing farmers with science-based, targeted information and with decision-support tools on climate and extreme weather events. These tools support informed decision-making and provide options and strategies for adapting to risk. In some countries, these tools are co-produced with farmers and other stakeholders to ensure their usability and usefulness on farms.
In addition, countries are implementing physically effective and cost-efficient nature-based solutions to prevent and mitigate natural hazard risks and impacts. These include solutions that leverage the potential of agricultural land to reduce specific natural hazard risks, such as paddy field dams in Japan used to reduce the risk of flooding. They also include on-farm practices that mitigate natural hazard impacts and generate productivity and sustainability benefits, even in non-disaster contexts, such as by improving soil health.
At the same time, in all studied countries there is scope for governments and agricultural sector stakeholders to further shift towards a resilience approach to disaster risk management. This will require:
Getting the policy incentives right: disaster assistance policies – and agricultural polices more broadly – need to provide coherent and consistent signals to farmers about the need to prepare for, prevent, adapt and mitigate natural hazard risks.
Targeting policy investment towards developing a resilience toolkit for farmers: governments can support stakeholders to build resilience through targeted training and extension services that help farmers to develop their entrepreneurial and risk management skills and to adapt and transform in response to uncertainty.
Engaging with trusted stakeholders to motivate farm-level change: industry and farm organisations, agricultural co-operatives and extension agents can connect all farmers with information on natural hazard risks, including previous disaster costs and losses, and provide them with options for preparing for and also adapting to those risks, and improve understanding of farm-level constraints to improving resilience.
Recent and projected trends in natural hazards-induced disasters underscore the importance of building agricultural resilience through disaster risk management. At the OECD, work will continue to ensure that governments, the private sector and farmers come together and learn from each other’s experiences and good practices to prepare for these threats over the long term.
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OECD/FAO (2021), Building Agricultural Resilience to Natural Hazard-induced Disasters: Insights from Country Case Studies, OECD Publishing, Paris, https://doi.org/10.1787/49eefdd7-en.
OECD (2020), Strengthening Agricultural Resilience in the Face of Multiple Risks, OECD Publishing, Paris, https://doi.org/10.1787/2250453e-en.
OECD (2020) Agricultural risk management and resilience: a holistic approach: https://issuu.com/oecd.publishing/docs/agricultural_risk_management_and_re
Baldwin, K. and F. Casalini (2021), “Building the resilience of Italy’s agricultural sector to drought”, OECD Food, Agriculture and Fisheries Papers, No. 158, OECD Publishing, Paris, https://doi.org/10.1787/799f1ad3-en.
Shigemitsu, M. and E. Gray (2021), “Building the resilience of Japan’s agricultural sector to typhoons and heavy rain”, OECD Food, Agriculture and Fisheries Papers, No. 159, OECD Publishing, Paris, https://doi.org/10.1787/4ed1ee2c-en.
Casalini, F., M. Bagherzadeh and E. Gray (2021), “Building the resilience of New Zealand’s agricultural sector to floods”, OECD Food, Agriculture and Fisheries Papers, No. 160, OECD Publishing, Paris, https://doi.org/10.1787/dd62d270-en.
Gray, E. and K. Baldwin (2021), “Building the resilience of the United States’ agricultural sector to extreme floods”, OECD Food, Agriculture and Fisheries Papers, No. 161, OECD Publishing, Paris, https://doi.org/10.1787/edb6494b-en.
Bagherzadeh, M. and M. Shigemitsu (2021), “Building the resilience of Turkey’s agricultural sector to droughts”, OECD Food, Agriculture and Fisheries Papers, No. 167, OECD Publishing, Paris, https://doi.org/10.1787/75430b86-en.
Ignaciuk, A. (2015-06-05), “Adapting Agriculture to Climate Change: A Role for Public Policies”, OECD Food, Agriculture and Fisheries Papers, No. 85, OECD Publishing, Paris. http://dx.doi.org/10.1787/5js08hwvfnr4-en