Evaluating Costs and Benefits of Farm-Level Disaster and Climate Risk Management Good Practices

Abstract

Agriculture is one of the main sectors affected by climate change. Smallholder farmers are especially hard hit, as their livelihoods depend on agriculture, which in turn is highly weather dependent. Thus, reducing climate change-related risks is a key challenge in agrarian-dependent societies and requires suitable and effective disaster and climate risk management efforts at farm level. In this chapter, we draw on case studies conducted by the FAO over several years in 10 countries that were published in 2019 and synthesize evidence from selected seminal papers and relevant literature based on the search terms “agriculture,” “disaster risk reduction,” and “cost-benefit analysis,” complemented by selected climate change adaptation literature when of interest. We discuss the benefits of farm-level risk reduction practices by highlighting useful methods and distilling key insights on the benefits of implementing those practices. We find that the following design features are important for generating useful insights into the benefits of farm-level risk reduction: (1) analysis of valid counterfactuals; (2) comparison across practices; (3) inclusion of local and qualitative information; (4) appropriate sensitivity analysis; and (5) cross-validation of input data. Results of such cost-benefit analyses indicate that people-centred approaches and soft risk reduction practices with low input costs are generally more profitable than larger infrastructure investments. Other favorable factors are continued engagement over time, local ownership, and consideration of social and environmental co-benefits. We recommend future studies and interventions to focus on the upscaling potential of risk reduction strategies and to further investigate systemic approaches. Targeted upscaling, through farmer-to-farmer replication or larger-scale investments, could bring significant returns via added benefits and avoided losses. Findings can inform the design of cost-benefit analyses in this field. Results can help farmers prioritize options and inform policymaking aimed at shaping enabling policy environments, promoting climate risk-informed planning, and upscaling of local interventions.