Our food system depends on the right information—how can we deliver?”
By Diego Arias (Agriculture Global Practice)
The availability and quality of agriculture risk information is hugely important for farmers, and the potential impact of bad information can be quite costly, leading the farmer to make wrong decisions and eventually lose revenue. Information systems that have unreliable sources and/or poor data processing protocols, produce unreliable results, no matter how complex the data processing model is. In other words, one can have “garbage in – garbage out.” Information is integral to agriculture risk management, not only in the short term to hedge against large adverse events, but also in the medium and long term to adapt to climate change and adopt climate smart agriculture practices. Climate-smart agriculture programs and agriculture risk management policies are toothless unless farmers have reliable information to implement changes on the ground.
The good news is that governments and financial institutions are realizing the importance of agricultural risk information-- not just as a public service, but also to develop sustainable agrifinance systems, where risk is managed appropriately in relation to the actual probability of losses. For example, Embrapa in Brazil produces such agriculture risk information for Banks and Insurance companies in a tool called ZARC (Agroclimatic Zoning), which allows a credit officer to see whether a specific farmer and crop in a specific municipality will have a probability of loss of more than 50% due to agroclimatic risks.