Food security and agricultural risk management

Organisations concerned with food security require timely information on predicted and actual crop production figures at different stages in time, to assess (for example) the market situation or act upon food scarcity events. Traditional crop statistical systems are often imbedded within a ministry or national agency geared towards its own internal requirements.

Statistics are often unreliable and take a long time to be published, while comparing data between systems is difficult. Satellite Earth Observation provides regular, real-time data on vegetation vigour and rainfall amounts for large areas, also in remote and/or inaccessible locations. Archives go back over 25 years, allowing historical comparisons and analysis of trends.

Food Security: early warning, monitoring and understanding the causes of natural hazards and associated agricultural risks with satellite Earth Observation

Traditionally agricultural monitoring systems rely heavily on in-situ measurements and agricultural statistics, while standardization of methodologies and coordination of data acquisition between and within countries are missing. Recent EO missions such as ESA’s Sentinels, offer the opportunity to establish an effective, semi real-time and large-scale agricultural monitoring system which supports government agencies and international organisations to collaborate and coordinate their response.

EO services provide valuable information on crop biophysical, soil and climate characteristics, but also on the occurrence, duration and intensity of natural disasters such as heat stress, droughts, and floods that strongly influence production figures.

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Index Insurance service

Index insurance schemes base their insurance premiums and indemnity payouts on an pre-determined index derived from Earth Observation (EO) data rather than on actual crop and livestock losses.  The insurance pays upon the occurrence of a triggering event, with EO data providing measurable indices (e.g. precipitation, vegetation index NDVI, biomass production, relative evapotranspiration, soil moisture) of the event. Given that this eliminates loss verification costs, an index insurance approach has substantial potential for scale up, even if sales and education of sales agents and insurance takers remain critical for effective insurance take-up.

Index insurance is used as a risk management tool in agriculture, food security and disaster risk reduction. Index insurance is important for development because it helps stabilize income for smallholders when yields are affected by weather. It is one of the tools MDBs have to reach their goal of reducing extreme poverty.

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