Integrated financial management of climate risks in the agricultural sector in Peru

The aim of the Climate, Agriculture and Risk Transfer project – CAT - is to create a risk transfer system generated and financed by the state and the private sector which contributes in a sustainable way to the adaptation of agriculture to climate change. A sustainable risk transfer system represents an adaptation strategy which contributes to food security and economic stability in rural areas. For this, the necessary conditions of an institutional and regulatory type will be established. An agricultural information system will be created and the respective capacities for the management and supervision of a risk transfer system of this kind will be developed.

An important aspect to highlight about the process of agricultural insurance is the role of the state and the insurance industry in the generation and management of information. The State is responsible for the rules in the generation of data for its exchange, and allows access to the insurance companies.

Currently, agricultural statistical information is being gathered by the Ministry of Agriculture and Irrigation and comes from the different regions. The information collected has the following restrictions: there is a limited budget for data gathering in the regions and at national level, the methodology is not probabilistic, there isn’t a framework of national area, it is not georeferenced, and it is not linked to the rural cadaster. Due to absence of an information system of easily accessible use, it is necessary to improve the existing agricultural information system and data gathering methodologies.

General objective

The consulting firm will be responsible for improving the agricultural information system; improvements will be made  available to the Ministry of Agriculture and Irrigation as well as to  the Agrarian banking and insurance sector.

Specific objectives

a) Evaluating and improving the process of reliable agricultural production data gathering and its storage (variables identified by the information component of the CAT project and prioritized by MINAGRI and the insurance and banking sector) with topnotch methodology and technology.

b) Elaborating and implement a collaborative information platform for the stakeholders of the Sustainable Risk Transfer System (SRTS).

c) Training in Peru, the technical teams of the stakeholders of  the SRTS, in the use of modern technology to ensure the sustainability of the specific objectives a) and b).