Around a billion people in the world go to bed hungry every
night. And with the world’s population
expected to rise by a third to some 9 billion by the year 2050 and
demand for agricultural raw materials set to increase by 70% in the
same period, the outlook for the future is bleak. In fact, the
supply situation in many countries has already reached critical
proportions today. It is no wonder then that world conferences like
the FAO World Food Summit in Rome or the Climate Conference in
Stockholm are desperate to find solutions to this problem.
Farmers around the world are urgently calling for solutions that
not only have an impact at a global level but above all have a
direct positive effect on their own farms. After all, agricultural
raw materials secure life – the livelihoods
of the farmers, the lives of a nation’s
people and the entire global population.
“Food, feed, fibre,
fuel” – a
farmer’s life is all about producing food,
feed for livestock, fibres for industrial purposes, and
agricultural raw materials needed to produce biofuels. Demand for
these agricultural raw materials is growing fast. At the same time,
the risks farmers face are also growing: to meet demand, they need
to increase their production and by investing in their farms. But
to do this, they need financial stability.
However, this financial stability is becoming increasingly
elusive. Today, farmers are finding it more and more difficult to
rely on their stable crop yields. The effects of climate change
– floods, late frost, drought and storms
– can result in highly volatile crop yields
for farmers and bring them to the brink of ruin. They take
considerable risks when investing in their future. In this
situation, it is vital that farmers get support in facing a higher
frequency of extreme weather events.
Governments and insurers need to create financial stability
soon. What is needed is a well thought-out crop insurance system
that supports farmers in the long term and thus also secures the
future of us all.
To meet the long-term demand for food, it is necessary to have
comprehensive risk management tools helping farmers in their
business. We see public-private partnerships (PPP) as the strongest
possible basis for an intelligent solution, in which farmers,
government and the insurance industry work together. The advantages
of a public-private partnership have also been acknowledged at the
highest levels: at the World Climate Summit in Copenhagen in early
December 2009, Lord Nicholas Stern called the PPP approach
absolutely essential. Farmers hit by the effects of climate change
would be able to cope much better with the help of good risk
management tools. At the same time, insurance solutions can foster
more rapid economic recovery, believes Stern.
This is the basis of SystemAgro. Successful crop insurance
systems have been in use for over 35 years and provide insurance
coverage for more than 200 million hectares. Munich Re has analysed
these systems and included the most successful aspects in
SystemAgro. This system is the optimal solution to help farmers
face the challenges of the future.
Thanks to its customised structure for each country, SystemAgro
stabilises the agricultural sector in the long term. It secures
farmers’ livelihoods, regardless of the
exposure they face or the type of agricultural production involved.
The system is available to all farmers and its centralised
structure makes it especially transparent and efficient.
What Munich Re offers
Munich Re brings farmers, government and specialist insurers
together and uses SystemAgro to develop the best-possible
sustainable solution, which draws on our wide-ranging expertise and
global business partnerships.
Munich Re combines high-tech components such as precision
farming, remote sensing and state-of-the art harvest technology to
be able to implement SystemAgro in any region of the world for any
size of farming operation.
If you require more detailed information, our experts are
available for more in-depth discussion.