Innovative financing packages needed for farmers

MANILA, Philippines - The International Labor Organization (ILO) called on APEC member-economies to enhance the resilience of farming communities through innovative financing packages in the context of climate change.

Lurraine Baybay Villacorta, project manager of Climate Adaptation Project of the ILO in the Philippines, said financial packages with risk reduction and preparedness work to increase the adaptive capacity of resource-poor farmers who are the key to building climate change risks-resilient communities.

The innovative integrated package includes a financial cum non-financial services, a weather index-based insurance, and disaster risk reduction initiative with early warning systems.

A resilient community can anticipate and plan for a sustainable future, thus ensuring jobs to millions of people through agriculture, she said.

In the Philippines, resource-poor farmers are the worst affected by impacts of climate change and their lack of capacity to adapt and cope to its impacts to agriculture is aggravated by lack of access to credit and financing.

Villacorta, who spoke during the recently-concluded APEC Symposium on Climate Change, said climate-related disasters represent a major source of risks for the poor, particularly farmers who are dependent on “good weather” for their survival and livelihood.

Hosted by the Philippines through the Department of Agriculture, the symposium gathered representatives from APEC member-economies to share various climate change experiences and initiatives in their respective countries.

Villacorta said the unpredictable weather patterns climate change bring, the increasing frequency and intensity of extreme weather events like typhoon, flood, and drought, serve to make more risky and uncertain farming activity.

The inability to adapt to these risks by resource-poor farmers, because of their economic condition, lack of assets, compounded by lack of access to credit and financing to cope with their loss in the event of disasters and climate change risks serve to trap them into poverty.

Through the CCAP Project of the ILO in Agusan del Norte which was implemented from 2009 to 2011 in partnership with the Department of Labor and Employment (DOLE) and the Department of Trade and Industry (DTI), under the MDG-F 1656 United Nations and the Government of the Philippines joint program on “Strengthening the Philippines’ Institutional Capacity to Adapt to Climate Change”, 800 poor farmers in the province were able to benefit through enhancing credit and finance access, in effect enhancing their adaptive and coping capacities to climate change consequences.

The ILO developed a package from a system of features preferred by the farmers and providers themselves.  According to Villacorta, access to market-based instruments often fails because they do not address the core problem which is the affordability to the poor.

“We also have to make sure that no matter how accessible and affordable the financial package, it has to be sustainable from the point of view of providers. A well designed credit, savings and insurance products bundled with non-financial services such as financial literacy, training on technologies and entrepreneurships, along with risk reduction efforts contribute greatly to enhancing productivity and ensuring sustainable livelihoods among climate vulnerable farmers in particular, and poor workers in general,” she said.