Swiss Re officially commits to supporting farmers and food security in Sub-Saharan Africa at G8 summit in Washington

Millions of citizens in Africa depend on agriculture for their livelihoods, but vulnerability to weather and climate-related shocks is a constant threat to their food security and well-being.

As climate change increases the frequency and intensity of natural hazards, the challenges faced by these communities will also intensify. Moreover, most of the smallholder farmers on the African continent lack access to credit and hence financing for higher yielding seed varieties due to risk aversion of the lenders. That is why Swiss Re has committed to partnering and collaborating with governments, businesses, donors and other partners over the next five years to progress sustainable business models that can support farmers and food security in Sub-Saharan countries.

Good risk management will not only help to smooth income volatility for farmers and players in the agricultural value chain, but will also unlock credit and mechanisation services. Based on this premise, Swiss Re will invest in resources equivalent to about USD 2 million per year to support the development of sustainable agricultural risk management markets in Benin, Burkina Faso, Ethiopia, Ghana, Kenya, Malawi, Mali, Mozambique, Rwanda, Senegal, Tanzania, Zambia and other interested countries with the collaboration of their governments, to cover farmers' weather and production risks, enable access to finance and help them engage in higher income-generating activities.

All parties of the G8 initiative working through the Grow Africa and the New Alliance for Food and Nutrition Security  projects announced on May 14, 2012 in Washington, recognise that achieving transformational and sustainable economic growth and improving smallholder livelihoods requires significant and socially responsible private investments.

"Our interest and engagement in this region is not new" says Swiss Re CEO Michel Liès, "but a defined collaboration with above mentioned governments along with other public and private sector stakeholders would really allow us to harness our respective strengths to make a difference.

Specifically, we aim to increase risk transfer capacity by a factor of 3 within 5 years. For Sub-Saharan Africa, this equates to an increase in risk capacity from the current USD 200 million to USD 600 million, which will allow the provision of agricultural insurance for up to 1.4 million smallholder farmers".  

"In essence, our aspiration is to provide farmers in Sub-Saharan Africa with the tools they need  to reduce the risks caused by factors outside their control namely, weather-related risks and thereby enable them to invest and generate higher incomes" explains Christina Ulardic, who leads Swiss Re's market development efforts in Africa. "Our belief is that market-based approaches to financial inclusion for smallholders are the only solutions that will be sustainable over time. It is for this reason that Swiss Re has for quite some time been investing in and partnering on the development of innovative microinsurance schemes such as weather and yield index insurance products to manage systemic risks.

An excellent example is the Rural Resilience (R4) project established in Ethiopia a few years ago, which is now being scaled up further, and currently being transferred to Senegal."