Innovative climate-risk finance project launched in Thailand

GIZ has introduced the latest four-million-euro project for upscaling ASEAN farmers’ access to financial tools essential for enhancing climate resilience and gender response in the agricultural sector.
Commissioned by the German Federal Ministry for Economic Cooperation and Development, the Innovative Climate Risk Financing for the Agricultural Sector in the ASEAN Region Project (AgriCRF) will be implemented at the regional level through the Food, Agriculture and Forestry Division of the ASEAN Secretariat, ASEAN Sectoral Working Group on Crops, and at the national level in Indonesia, Thailand and Vietnam.
This three-year project, which runs from January 2023 to December 2025, is aimed at improving climate resilience, promoting gender equality and availability of financial products regarded as the three key solutions to sustainable agriculture.
“With this new project, we can really conduct activities and pilots on the ground with stakeholders from the agriculture and financial sectors up to our farmers in the field,” Nana Kuenkel, Agriculture and Food Cluster Director and Coordinator said during a recent multistakeholder consultation workshop.
Prapit Wongtiam, Director of the Planning Bureau at the Department of Agriculture (DOA), said agriculture is a vital source of income for the majority of the Thai population, as it is for its ASEAN counterparts. However, the country is experiencing more frequent natural disasters and extreme weather such as heat waves, droughts, storms and rising sea levels.
“Many scientific studies have shown Thailand is listed among the most vulnerable to long-term climate change impacts on productivity. Enhancing our farmers with climate-resilient capacities is crucial,” she said.
At the regional level, a publication titled “10 Phases in Developing a National Crop Insurance Program: Guide Overview” was introduced in 2018 as an initiative for the agricultural sector to tackle climate change. The ASEAN Sectoral Working Group on Crops also introduced its 2021-2025 strategic plan to improve climate resilience in the agricultural sector.
In Thailand, the government and private sectors, particularly those in research and development, are working with stakeholders to improve climate resilience capacity among farmers and their access to innovative financial mechanisms, she said.
- Climate-risk financing: innovative financial instruments and mechanisms should be available to help manage and transfer the financial risks associated with climatechange impacts.
- Resilience enhancement: implementation of strategies and measures will improve farmers’ capacities to withstand and recover from any unforeseen climate change impacts.
- Gender responsive: account will be taken of and consideration given to gender diversity and equality to ensure that interventions are effective, sustainable, and equitable for all individuals.
Over 70 participants from the Department of Agriculture regarded as the key partner, and related stakeholders comprising government officials, agro-economic experts, academics, think tanks, and farmers groups participating in the workshop actively shared their inputs and recommendations on how to implement the project and drive forward the initiatives through the following three topics:
1) Financial products and services for climate-resilient and gender-responsive climate finance
An overview of existing financial products and services were collected including potential areas for improvement such as reducing the operational cost of the crop insurance scheme and exploring customized crop insurance packages to meet the needs of farmers. Digitalization and use of technology to improve existing financial produces were also emphasised.
2) Financial literacy and capacity building for farmers and their institutional partners
Farmers faced challenges due to impacts of climate change such as unpredictable weather and extreme weather events. The discussion recommended equipping farmers with knowledge to better manage climate-related risks and create a good understanding of the benefits that climate risk financing products such as crop insurance can bring.
3) Creating an enabling environment
Existing government policy in Thailand to support farmers during extreme weather events and disasters were shared including on-going initiatives to improve the current policy framework and coordination alignment. The discussion recommended exploring the role and engagement of the private sector and businesses as the current support provided to farmers relies heavily on government support and subsidies.
Mr. Tost said the team would take account of the recommendations from the working groups and would collaborate with DOA and other stakeholders to implement the project towards the aimed outcomes including the promotion of climate risk financing in ASEAN through regional technical knowledge exchange and policy recommendations, and increasing the number of climate risk financing products and services that are gender-responsive and meet the farmers’ needs.
A linkage between sustainable standards and climate risk financing for farmers in the ASEAN region should also be developed on the targeted project completion, he said.
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