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Today’s multi-crisis context underlines the need for rural resilience. Ramping up the capacity of rural people to manage risks, and prepare for and recover from shocks is essential to eradicating rural poverty and ensuring no one is left behind.

Agricultural insurance and climate risk insurance can help break the vicious cycle of shocks, indebtedness and poverty that prevent small-scale producers from improving their lives. When used holistically with other tools to manage agricultural risks, insurance enables farming families to produce, earn and invest more, building their resilience.

Insurance can de-risk investment by transferring otherwise unmanageable risks away from farmers as well as the businesses and institutions that serve their communities. In this way, rural economies are stabilised and safeguarded against shocks.

While agricultural and climate risk insurance is widely available in developed countries, there is a huge protection gap in rural areas of the developing world where it is needed most.

Insurance does more than build resilience

IFAD has been working on agricultural and climate risk insurance since 2008. From 2018, IFAD’s agricultural and climate risk insurance programme, INSURED, has been integrating insurance into IFAD programmes by bundling insurance with other products, including farming inputs and loans. This creates better value for the clients and helps make rural people a less risky investment.

By integrating insurance, development programmes can forge stronger links with the private sector which, in turn, improves access to insurance while supporting better agricultural productivity and strengthening food security. Crowding in insurers to development programmes can also help develop sustainable markets and encourage investment in rural areas.

However, providing insurance alone is not enough. It must be combined with education and technical assistance for all stakeholders, including producers, farmers’ groups and insurance companies. To help achieve this, the Insurance Toolkit supports insurance workstreams and training.

INSURED is implemented by the multi-donor Platform for Agricultural Risk Management (PARM) and is funded by Sida.

Related publications

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INSURED Indonesia Country Update: Making climate risk insurance available to small-scale producers

September 2023
IFAD’s INSURED programme has been working with partners in Indonesia to improve the availability of climate risk insurance that enables farmers to strengthen their resilience.

INSURED - Insurance for rural resilience and economic development

June 2023
INSURED is a technical assistance programme working to strengthen agricultural insurance in IFAD’s portfolio.

Filling in the blanks: How to address data gaps to develop better livestock insurance for smallholder farmers

September 2022
Gathering good data can reduce the cost of livestock insurance for smallholder farmers, making coverage affordable and building their resilience. The Insurance Toolkit new brief shares lessons learned in Georgia.

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What I’ve learned about resilience from rural communities in Guatemala

October 2022 - BLOG
Faced with the impacts of climate change, small-scale producers in Guatemala urgently need to manage risk using tools like insurance. Read how INSURED promotes the use of agricultural insurance to build resilience and strengthen livelihoods.

Promises kept: Crop insurance makes a difference for Kenya’s small-scale farmers

March 2022 - STORY
Farming can be a risky business indeed. Recently, some IFAD-supported initiatives have begun piloting crop insurance programmes for participating farmers – and for KCEP-CRAL farmers in Kenya, the new insurance policies arrived just in time.

Bringing the benefits of agricultural insurance to smallholders in Viet Nam: Building awareness and understanding

November 2021 - STORY
Between sowing their seeds and selling their harvest, smallholder farmers in developing countries face a multitude of potentially devastating risks. In Viet Nam, as in countries around the world, many of the most severe threats are climate-related, including storms, floods, excessive heat, frost and drought.

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