|Risk and uncertainty are inherent in agriculture and commodity supply chains. This stems from the vagaries of weather, the complexity of biological processes, the seasonality of production, the geographical separation of production and end users, the globalization of commodity chains and price transmission, and the unique political economy of food in domestic and international settings. Given the pervasiveness of risks, farmers, agro-enterprises, and governments have applied a broad range of informal and formal approaches to reduce, mitigate, re-distribute, transfer, or simply cope with risks.
The World Bank Group assists clients to develop and apply more effective and sustainable strategies for managing agricultural risks through investment lending and technical assistance involving (i) physical infrastructure (e.g., irrigation and drainage facilities); (ii) technology development and transfer (e.g., improved crop varieties and animal breeds); (iii) improved management practices (e.g., integrated pest management, quality control); (iv) financial instruments (e.g., insurance, savings; inventory credit; catastrophe bonds); and /or (v) public programs (e.g., safety nets). This work is undertaken across the World Bank’s Sustainable Development Network, within several financial sector units and the International Finance Corporation.
Under one program supported by the European Union and the Swiss and Dutch Governments, particular emphasis has been placed on supporting market-based risk management approaches and supporting broader applications of agronomic, weather, and price data for ex ante risk management. This program involves technical assistance in identifying and quantifying risks in agriculture and agricultural supply chains, and advisory services and training on alternative risk management approaches and instruments. The World Bank’s support for agricultural risk management is normally provided in conjunction with other development partners, including bilateral and multilateral agencies, regional technical organizations, research and training centers, NGOs, and others.
One of the main World Bank Units invloved in these programs has been the Commodity Risk Management Group (CRMG) based in the World Bank's Agriculture and Rural Developement Department (ARD). Recently, the name of the CRMG has been changed to the Agricultural Risk Management Team (ARMT) to better reflect its work program.
Visit the links on the left for information on agricultural risk management programs and relevant publications and resources.