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Fighting Risk to Feed the Future

By Feed the Future Innovation Lab for Assets and Markets Access

This week all eyes are turned to the efforts of universities, governments, and development organizations that, with the support of the U.S. Government’s global food security initiative, Feed the Future, are working to #endhunger and create pathways out of poverty.

Here is one such endeavor:

Fighting Risk to Feed the Future

Risk makes and keeps people poor. Paralyzed by the fear of imminent drought, pests, or flood, farmers will not make the extra investments needed to boost yields. When a severe event does hit, farmers are left with no harvest and no way to buy seeds for the next season. With such uncertainty, how can farmers feel secure enough to save, invest, build up resilience, and thrive despite the shocks they face each season?

The Feed the Future Innovation Lab for Assets and Markets Access (AMA Innovation Lab) is tackling this question by breaking down research barriers and connecting social science research with the plant sciences to create new synergies that will offer better protection for vulnerable farmers. The aim is to embolden farmers to try new seeds, invest in improved inputs, and grow more food to feed their families and communities.

In a large-scale, randomized controlled trial spanning Mozambique and Tanzania, University of California, Davis researchers, led by the AMA Innovation Lab Director, Professor Michael Carter, are connecting advancements made in drought tolerant (DT) seed technology with new financial innovations to investigate how the broadest range of farmer risk can be mitigated. Researchers believe that bundling these two innovations together will amplify the development impacts well beyond the effects of either innovation implemented alone.

“We realize that investing what little liquidity you have into agricultural inputs can be a scary proposition, even if those inputs are supposed to have high returns on average. Farmers are keenly aware that drought tolerant does not mean drought proof, ” observed University of California, Davis Ph.D. candidate Jonathan Malacarne, who oversees the project in Mozambique.

By bundling a drought tolerant maize seed developed by CIMMYT with an advanced satellite imagery-based index insurance product, this intervention may more effectively cover farmer risk. DT maize performs well during mild to moderate drought, but these tolerant varieties still fail in extreme droughts. Extreme drought risk can, however, be insured using satellite-based index insurance. During the most catastrophic events when even drought tolerant seeds fail, the index insurance triggers, buffering against these extreme risks, and enabling farmers to recover and prepare for the next season.

“The logic of this bundling has been immediately apparent to our seed company partners, who are strongly supportive of our program and keen to scale it up,” commented project director Carter.

“The 2017 maize harvest was miserable across half of our study sites in Tanzania, triggering insurance payouts to farmers who purchased the insured DT seeds.  The key test will be the upcoming planting season: Will these insured farmers prove resilient and able to sustain their investment in these higher yielding seeds in the wake of this year’s drought?”

This bundling of two very different but complementary risk management innovations has the potential to allow farmers not only smooth consumption, but to increase investments in seeds and other improved inputs. By giving farmers a package of innovations to more comprehensively manage their inherently risky livelihoods, farmers can move past costly cautious behaviors to productive risk taking to enable movement out of entrenched poverty, past subsistence farming, and into sustainable and inclusive agricultural led economic growth.

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