WASHINGTON, May 3, 2010 – The World Bank and the Inter-American Federation of Insurance Companies (FIDES) signed a grant agreement aimed at reducing farmer vulnerability in Latin America and Caribbean.
Agriculture is a key sector for many Latin American and Caribbean economies that employs a significant proportion of the population. However, in recent years, the increased number and magnitude of extreme weather events poses serious threats to the competitiveness of the agriculture sector.
“This grant seeks to create an environment where insurance companies can expand coverage to farmers at increasingly affordable costs,” said Diego Arias, World Bank Senior Agriculture Economist. “This partnership with FIDES is the consolidation of years of joint work in Latin America.”
The grant, which will provide a total of US$390,000 over the next three years, will help FIDES develop agricultural insurance markets in the region through:
- Improvements in weather data and weather risk mapping to support the design of agricultural insurance contracts.
- Training on the design and administration of agricultural insurance for local insurers, financial institutions, universities, and public sector officials.
“By promoting agricultural insurance markets through capacity building and better data management, we expect the insurance industry in Latin America and the Caribbean to expand coverage and help farmers reduce their financial exposure to production shocks,” said Enrique Rodríguez, President of FIDES.
The grant contributes to the World Bank’s efforts to build national capacity for comprehensive risk management frameworks in the agriculture sector that address the challenges arising from climate change. The grant’s activities will be overseen by a joint steering committee led by FIDES, which will include representatives from the Inter-American Development Bank (IDB), the Central American Bank for Economic Integration (CABEI), the Inter-American Institute for Agriculture Cooperation (IICA), and the World Bank, among others.