AFRICA – African Development Bank Group (AfDB) has presented its planned USD 1 billion facility to provide insurance coverage to more than 40 million farmers across the continent against severe impacts of climate change.
The facility was widely lauded by the World Food Programme (WFP), development agencies, insurance operators, and the private sector at the ongoing Conference of Parties (COP28) in Dubai.
The bank’s President, Dr. Akinwumi Adesina, said the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) aims to mobilize USD 1 billion of concessionary financing, high-risk capital, and grants to support the African insurance industry.
The Facility is designed to guard farmers and countries against catastrophic weather-related incidents and to stimulate private-sector investment in agriculture by mitigating risks.
Adesina had on a sideline said that over 97% of farmers in Africa do not have agricultural insurance.
“We must support farmers, not abandon them, in the face of rising frequency and intensity of extreme weather events like drought, floods and pest infestation,” Adesina said.
Adenisa further emphasized on the need to ensure that farmers and actors along the agricultural value chain are covered by insurance at scale.
The ADBG chief revealed that over 97% of farmers in Africa do not have agricultural insurance, instead they’re fond of praying over everything even things that ought not to be prayed for.
“Their only insurance is to pray when they plant that it will rain, pray when they harvest that there will not be rains or pest devastation, and pray when they market their crops that prices will not collapse.”
“The eyes of more than 40 million smallholder farmers in Africa are on us. Let us make ACRIFA the answer to their prayers,” he implored.
Investing in smallholder farmers is a sustainable and impactful mode of boosting productivity and ultimately shielding Africa from a looming food crisis.
According to another AfDBG report, the world’s 500 million smallholder farmers produce up to 80% of food in some areas of developing countries and support the lives and livelihoods of up to 2.5 billion people.
“Smallholder farmers represent the largest segment of farmers in Africa,” outlines the report. “They understand the challenges of growing food in a changing climate and can offer the world independent diversified farms and food products.”
The agricultural sector in Africa is generally characterized by a high percentage of smallholder farmers (80%) cultivating low-yield staple food crops on small plots with minimal use of inputs.
The report revealed that despite its importance, smallholder farmers, productivity remains dismal, undermining Africa’s overall productivity and food security. The agricultural sector’s productivity in Africa considerably lags other developing regions.
“The need to support the smallholder farmers and boost their productivity has become imperative given the recent developments in the global food system that may adversely affect food production in Africa,” outlines the report.
“Addressing challenges faced by smallholder farmers and improving their productivity has the potential to help in reducing the impact of the looming food crisis on food security in the continent.”
Moreover, in another report by the World Food Program (WFP), smallholder farms account for only 12% of the world’s farmland, yet they provide an estimated 80% of the food produced in Asia and Africa.
In African countries, agriculture is the backbone of most economies, contributing about 25% to their Gross Domestic Product (GDP).
Focusing on South Africa, the report states, “While smallholder farmers are the primary food producers in Southern Africa, contributing to 90% of food production in some countries, often systems in the region do not support profitability for them.”
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