Policy recommendations

Agricultural adaptation will be crucial for protecting farmers’ livelihoods and mitigating the impact of climate change on food security and poverty. At the same time, it will help lay the foundations to support the investment and growth that agricultural sectors in developing countries require. This brief has highlighted the role that more accurate and accessible weather information and tailored financial products can have in promoting investment in a world with greater weather variability. Policymakers will need to understand which interventions will work best in their context, given the substantial heterogeneity across agricultural sectors in the developing world.

The evidence presented in this brief highlights four areas for policy action:

  1. Improve the quality of national weather and climate information. Investing in national weather infrastructure can pay for itself by helping to avoid asset and wellbeing losses, together with gains in productivity (World Bank, 2017). In addition, partnerships between policymakers and researchers in developing countries and global weather forecasters can help rapidly translate complex global models into local weather forecasts (Webster, 2013).
  2. Evaluate how weather and climate information can be best delivered. Weather and climate services (WCS) offer a promising way to utilise existing IT and communications infrastructure to deliver tailored information to farmers. These services differ considerably with respect to the information they provide and how it is communicated. Similarly, the extent to which farmers use these services varies by location, household, and farm characteristics. As such, it is important to understand what types of services can be most effective in different contexts.
  3. Design viable insurance products. Weather-index insurance products can be an effective tool to mitigate risk and support investment. Currently, the feasibility of these products is questioned due to demand-constraints and a lack of uptake. These constraints could be alleviated through better product design, pricing, or communication.
  4. Develop flexible and tailored credit markets. Credit and insurance can complement each other to incentivise borrowing and riskier investment. Both supply- and demand-side constraints prevent farmers from borrowing. To alleviate the impact of greater weather variability, credit products should offer flexibility or a closer alignment with agricultural income. Policymakers should work with financial providers and farmers to understand how these products can be adapted to local needs.