How digital technologies help build resilience for smallholders
During the G-STIC conference of 2019, the "Digital with Purpose: Delivering a SMARTer 2030" report by GeSI and Deloitte was discussed. This report highlights the impact of digital technologies on the SDGs and includes case studies showing how these technologies enhance climate
Expert story by
Dietrich Van der Weken
Developing digital technologies that help reduce inequalities
One such case study discusses the WINnERs (Weather Index-based Risk Services) programme. This programme is supported by EIT ClimateKIC (the EU’s leading climate innovation initiative) and co-financed by the World Bank. The WINnERs case study is all the more impressive as it clearly demonstrates how digital technologies, when developing and deploying them with a clear commitment to the SDGs, can help reduce existing social and economic inequalities.
The programme is socially innovative to the core. Its central component is a weather index-based risk service offering smallholder farmers insurance against weather and climate-driven risks.
Smallholder farmers are particularly vulnerable to the impact of climate change and extreme weather conditions. According to the WINnERs programme “wheat, maize, sorghum, and millet yields are expected to fall by 8% by 2020 across Africa and South Asia. In some African countries, yields from rain-fed agriculture could fall as much as by 50% and prices of key food crops could increase by 50% to 120% across Sub-Saharan Africa (SSA) by as early as 2030.”
Creating more sustainable food supply chains
But as the impact of climate change and extreme weather conditions is felt worldwide and at rates much faster than anticipated, the entire food supply chain is at risk. While smallholder farmers face the greatest and most direct danger, their vulnerability also puts pressure on food manufacturers and global retailers.
Building resilience for smallholder farmers is, therefore, crucial to creating more sustainable food supply chains. That requires better integration of smallholder farmers into these supply chains and developing more refined strategies for managing farming risks.
Weather index-based insurance can be one way of achieving that. Unfortunately, the substantial basis risk and the non-existence of robust regulatory frameworks hold back the large-scale deployment of weather index-based insurance policies.
Modelling weather and climate risk exposure
This is precisely where the WINnERs programme comes in. The programme models weather and climate risk exposure using state-of-the-art digital technologies. These include specialist tools such as machine learning to collect and analyse climate data, making it possible to predict the probability of extreme weather events for areas no larger than 5 km2. The predictions help smallholder farmers plan ahead to secure their crops and make it easier for them to access insurance services.
State-of-the-art crop modelling technology translates the available weather data into agricultural risks, such as drought and crop yield loss. Such microscale agricultural risk predictions provide a solid foundation for the development of insurance contracts that share weather and climate risks more equitably across all actors of the food supply chain. Artificial intelligence further helps reduce the level of insurance premiums.
Systemic transformations, contributing to several SDGs
The WINnERs weather index-based insurance not just helps guarantee an income for smallholder farmers. It is also instrumental in developing regulatory environments for insurance products in developing countries.
And while this programme delivers systemic transformations in agriculture (SDG 2), it contributes to many other SDGs as well. This cross-cutting nature makes the programme a great example of what market-ready integrated technological solutions can help achieve. The report by GeSI and Deloitte is very explicit about the benefits of the WINnERs programme for several SDGs:
- SDG 1: Extreme poverty is reduced through the provision of a more stable income, acting as a social protection system and ensuring access to the essential financial services required to improve economic standing.
- SDG 2: Access to sufficient food is ensured throughout the year for those in vulnerable situations, reducing malnutrition and improving the sustainability of food production systems.
- SDG 8: Imperial College London estimates the WINnERs programme will contribute 2% to Tanzanian GDP through increasing maize production. Across sub-Saharan Africa, the impact on maize yield is projected to improve GDP by 2.6%, equating to an approximate economic benefit of $62.9 billion.
Improving resilience thanks to digital technologies
The WINnERs programme supported by EIT ClimateKIC and co-financed by the World Bank is an excellent example of how digital technologies can help improve the resilience of the entire food supply chain. Its weather index-based risk service successfully encourages smallholder farmers to abandon traditional farming patterns, and plan ahead to secure their crops.
Digital technologies, including machine learning, artificial intelligence and crop modelling, facilitate microscale agricultural risk predictions. These, in turn, provide a solid foundation for developing insurance contracts that share weather and climate risks more equitably across all actors of the food supply chain.