STiR coffee and tea magazine

56 STiR coffee and tea / Issue 2, 2019 (April / May) By Bethany Haye C offee farmers worldwide are facing a slew of urgent challenges. One of the most threatening is climate change, responsible for increasingly severe weath- er events that devastate crops and can leave smallholders financially ruined with no resources to re-start their operations. In a small-scale survey, researchers asked 45 coffee farmers how, if at all, climate change had affected them. More than 90% percent reported changes in average tem- perature; 74% said droughts had become longer and more severe, and 61% reported an increase in mountainside erosion and landslides because of more rain. "They also noted impacts of these changes on their crops: 91% reported changes in the flowering and fruiting cycles of the coffee plants… Because the planting and harvesting seasons are no longer regular or predictable, many farmers can't rely on traditional seasonal indicators to guide them on the right time to plant, harvest or tend to their coffee crops." Up to now, growers have largely been left to their own devices, or if they're lucky, benefitted from small government subsidies when weather destroyed their crops. But so far, insurance schemes have not helped farmers in a major way. The Colombian agricultural insurance market is still not well-developed in 2019. Now, Blue Marble and Nespresso have joined in a pilot program to bring weather- indexed microinsurance to coffee-growers in Caldas, Colombia, the first time most of these growers will have owned insurance policies. Building on a relatively recent formula for insuring farmers against weather-related risk, the parametric insurance policies cover higher-than-expected rain and drought during the periods of the year when coffee beans are young and most susceptible to weather shocks. Here's why this new approach stands a chance of working where pre- vious insurance schemes have failed. In the past, programs introduced by huge conglomerates not specialized in agricul- tural – Spanish insurance giant Mapfre in 2005 and 2007 and in 2011 by Venezuelan insurer Previsora – never gained traction. The Colombian government got involved for the first time in 1980 through the state-run Caja de Crédito Agropecuario, Industrial y Minero to insure crops and livestock as well as backing loans to farmers. In those low-tech, low-infrastructure days, data was scarce, and the offer was not well-adapted to growers' needs. It was also a losing venture for the insurers, as premiums had to be low, risk was high, policies and claims were poorly researched and managed. Only very high-risk holders bought policies, and companies regularly ended up paying out more than they took in while at the same time leaving many holders with nothing. Innovative Crop Insurance Comes to Colombia Blue Marble and Nespresso are bringing weather-indexed microinsurance to coffee-growers in Caldas, Colombia. For many, it's their first opportunity to obtain crop insurance. "This pilot initiative helps to establish a support mechanism for smallholder coffee farmers in Colombia so that they can continue to thrive in the face of climate change." – Guillaume Le Cunff, president and c.e.o. Nespresso USA Risaralda has a unique, perfect geography for coffee, but that also makes it highly vulnerable to climate change Photo by Natalie White courtesy phys.org.

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