Disaster Risk Financing for Agriculture : Fact Sheet 1 - Introduction to Disaster Risk Financing for Agriculture

Overview & Synopsis

DRFA focuses on achieving a balance of financial mechanisms that maximize the welfare for households, the economic activity and resilience for communities, and the budget efficiency and certainty for governments. In particular, DRFA advocates for financial mechanisms that can be put in place before the fact (ex ante) to increase certainty of financing and planning. Vulnerability to disaster risk is compounded by low access to suitable and affordable climate-risk insurance products and services. Effectively managing the risk of losses in agriculture starts with a proper understanding of risk and the financial mechanisms that can respond to disasters, as well as with strong, well-informed institutions and partnerships. It is referred to this set of tools as Disaster Risk Financing for Agriculture (DRFA). DRFA focuses on achieving a balance of financial mechanisms that maximize the welfare for households, the economic activity and resilience for communities, and the budget efficiency and certainty for governments. In particular, DRFA advocates for financial mechanisms that can be put in place before the fact (ex ante) to increase certainty of financing and planning.