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African Economic Conference Calls for Climate Insurance for Farmers

27 October 2011: With increasing volatility due to climate change and price shocks, delegates to the Sixth African Economic Conference heard that investment in agriculture alongside stabilization and insurance schemes, including for small holder farmers, may be necessary to ensure domestic price stability.

Convening from 25-28 October 2011, in Addis Ababa, Ethiopia, under the theme "Green Economy and Structural Transformation," the African Economic Conference was jointly hosted by the UN Economic Commission for Africa (ECA), the African Development Bank (AfDB), and the UN Development Programme (UNDP). Delegates highlighted the lag in accomplishing the first Millennium Development Goal (MDG) on eradicating extreme poverty and hunger in Africa. They noted that small farmers in particular are becoming increasingly vulnerable, which is contributing to price instability in domestic markets that are already feeling the impacts of international price instability.

Patick Guillaumant, Professor Emeritus, Auvergne University, speaking during a session on Natural Resource Management, Bio-Fuels, Food Security and Sustainable Development, underlined that a commodities price boom, particularly in food prices has led to "severe consequences on urban poverty in developing countries." Guillaumant lamented that, as a consequence of climate change, it would be unlikely that price volatility declines.

Delegates heard that price and weather-indexed insurance schemes, together with aid, may be necessary to stabilize prices in domestic markets. It was further suggested that these schemes be focused on small farmers in particular as they are vulnerable to climate change risk. One delegate called for addressing food insecurity in Africa through short-term emergency activities and long-term responses to transform African agriculture from subsistence into a business venture. [AfDB Press Release] [Conference Website]