The Green Climate Fund, which is supported by Belgium, is enhancing the resilience to climate change of 45,000 households in Senegal.
Climate change is already causing periods of extreme drought in many parts of the world. Small-scale farmers in the South, in particular, deserve more support. The Green Climate Fund (GCF), set up by the United Nations to help developing countries reduce their greenhouse gas emissions and adapt to the inevitable consequences of climate change, can play an important role in this regard. Belgium, too, is contributing to the GCF.
The so-called 'R4 Rural Resilience Initiative', launched in 2011 by Oxfam America and the World Food Programme (WFP), is one of the projects funded by the GCF. This initiative ensures that farmers have more reserves and a stronger financial basis, so that they do not have to panic and sell their livestock or keep their children away from school and mobilise them after a failed harvest due to a lack of rain. So far, the initiative was able to reach 45,000 vulnerable smallholder households Senegal, representing 405,000 people.
It is cheaper for farmers to manage their own risks than for the international community to deal with an unexpected crisis. The initiative therefore uses a system that the western world takes for granted: insurance. It contains four components.
It is cheaper for farmers to manage their own risks than for the international community to deal with an unexpected crisis.
The risk is reduced when farmers manage the natural resources in a better way and produce a stock of food in advance. This can be achieved through community asset building, among other things. For example, some farmers built a better water storage and irrigation system which ensures that their villages have sufficient food and water in the case of an emergency. In return for this work, they are compensated for weather-related losses, as in the case of an insurance. Munyange, a farmer, confirms: 'It was hard work, but in the end our farms are getting better developed. And we want to take it a step further.'
At this stage, farmers will take out an insurance that they can obtain through community work. Even the poorest farmers will thus have access to the insurance thanks to the work they have done. The risk will 'move': from the farmer’s own risk in the event of a disaster to a risk for the insurance companies.
Now that they are less dependent financially, farmers can store part of their harvest and wait to sell until the market price is more favourable, which allows them to make more profit.
When an insurance gives farmers more stability, they will also be more inclined to take out a loan, as Mulata Atsbeha did. The drought had completely destroyed his harvest. He could not even feed his animals with it. But thanks to an advantageous interest rate, he was able to take out a loan. Mulata used the money to set up his own business in animal skins. 'Things have been going well for me since then', says Mulata. 'My company became very successful. I started to make profit and was able to repay the borrowed money before the deadline, up to the last cent.'
Before the project started, the farmers used to sell their products to purchasers as quickly as possible, often at too low a price, because they had no place to stock their products and often desperately needed the money. Now that they are less dependent financially, farmers can store part of their harvest and wait to sell until the market price is more favourable, which allows them to make more profit. They can also use their stock for themselves should the harvest fail. In financial terms, too, farmers now have a stronger basis on which to rely if necessary.
With these four components, the R4 initiative makes farmers significantly more resilient to climate-related shocks. It also stimulates the financial market by allowing farmers to save more.