Page 43

most from improved climate forecasts, provided that they can gain access to resources needed to respond appropriately to forecast information.

By contrast, producers who have accumulated wealth or are well-insured may benefit little from skillful climate forecasts in an extremely bad crop year because their climatic risks are already covered. In the United States, for example, federally subsidized crop insurance to cover climatic risk has been available to U.S. farmers in its present from roughly since 1948 (Easterling, 1996). Moreover, U.S. agricultural history is marked by instances in which the federal government has provided insurance-like income support to farmers suffering income losses from extreme climatic events. In this case, the cost of unfavorable climatic conditions may be shared widely among taxpayers and the benefits of improved forecasts in bad years may flow mainly to the national treasury as avoided costs. In good years, however, farmers may be able to use skillful forecasts to increase their output. (Subsidized insurance and income-support programs may alter farmers' coping strategies by encouraging them to gamble with high-vulnerability crops, because they gain the benefits while the treasury takes the risks.)

The agricultural sector in low-income countries does not often benefit from government assistance in the form of insurance or insurance-like coping strategies, although governmentally organized drought relief is not uncommon—for example, during the 1990-1991 drought in Zimbabwe (Magadza, 1994). Poor countries usually cannot afford to invest much in the institutions for societal buffering against climatic variation. Little institutional buffering occurs in the form of ex ante preparations, such as appropriate subsidies, insurance, and infrastructure for delivering relief, or even ex post relief such as loans or food shipments. Notwithstanding or perhaps because of government neglect, people in developing countries have perfected very sophisticated nongovernmental insurance-like coping strategies that accompany traditional ex ante production diversification. These strategies must be taken into account in assessing the value of improved climate forecasts.

Formal and informal nongovernmental social institutions such as obligatory sharing within groups and community self-help organizations are important local buffers. In the African livestock sector, herding families in the areas with more favorable local climate conditions adhere to social obligations to provide assistance to those in less favored areas. Many pastoral societies generate a strong sense of social interdependence, establish obligations to help and support less fortunate friends and relatives during times of need, and develop strong norms of reciprocity. These insurance-like institutions have been extremely effective over time (Coughenour et al., 1985; Ellis et al., 1987; Galvin, 1992). In the semiarid tropics of India, where sedentary agriculture is practiced and weather

The National Academies of Sciences, Engineering, and Medicine
500 Fifth St. N.W. | Washington, D.C. 20001

Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement