18 Dec 2019

Mitigating the risk that comes with climate change

An interview with Peruvian cocoa farmer Luis Mendoza Aguilar at the COP25 climate summit

2019 COP25 780

Luis Mendoza Aguilar is a cocoa farmer and member of the Fairtrade certified cocoa cooperative, NORANDINO, based in Piura, northern Peru. He is also a member of the board of CLAC, the Fairtrade producer network in Latin America and the Caribbean.

Luis attended the COP25 climate summit with Fairtrade, to share a small-scale farmer’s perspective on the impact of climate change on livelihoods, and the urgency of taking action to support producers to adapt. Keeping up the momentum from the summit, Fairtrade will be moving forward with plans to pilot a climate risk insurance offering for Fairtrade producers, as well as continuing to advocate within the EU and elsewhere for stronger policies related to climate change.

We asked Luis about his perspective on climate change effects like extreme weather, what farmers themselves bring to discussions of climate change adaptation, and what he thinks is needed to help farmers cope with the damage and loss these events can cause.

What are the challenges that farmers face with climate change, especially related to extreme weather?

As a producer, we believe we have a lot of challenges. We are highly exposed, and sensitive [to risk, since] we have few resources to adapt to these weather events. Specifically we are very exposed to floods and other events that reduce our production and productivity, which reduces our incomes and is our main problem. Due to these lower incomes, we have little capacity to adapt. We need to analyse what instruments are available to reduce these limitations.

What are some examples of extreme weather that producers in Latin America and the Caribbean have had to cope with?

In the Amazon, rain that used to be distributed [through the year], has become concentrated into two to three months in recent years. The same thing happened on the coast. This variability has lowered production – in some cases nearly 50 percent of our production is damaged. In my cooperative, NORANDINO, and as a country, we are not yet prepared to manage these phenomena.

In the case of the Dominican Republic, producers experienced cyclones, including Maria, which reduced the production of bananas by between 18 and 25 percent. This is significant damage that could be mitigated for farmers [with some kind of safety net].

Are producers aware of and interested in climate risk insurance?

As small producers, yes we are aware of the existence of this kind of insurance, but the level of knowledge is not high. What’s available is a traditional insurance for catastrophic events, meaning that we need to verify the damage and many times there are delays with the payments. The coverage is also not what we want. So we are interested in other types of insurance instruments that allow us to increase coverage and improve productivity and mitigate the effects [of extreme weather events]. This is in addition to the adaptation and mitigation practices that we are trying to introduce, such as agroforestry.

As a roadmap to implement this type of insurance, we believe we already have a lot of experience. We are communities with nearly 7,000 small producers, with a lot of institutionalized strengths. This experience can help with a pilot project and learning lessons that can lead to improvements, including on timely payments. We understand that these types of insurance are parametric, meaning they are related to climatic and crop information [and payments are triggered by an event]. This is ideal because it is simpler than other types of instruments.

Would producer organizations be willing to be involved in training farmers on climate risk insurance?

We believe the implementation of a pilot project is ideal. As NORANDINO we have a lot of experience with adaptation and mitigation with our crops, including coffee and cocoa. A pilot project will give us new insights and understanding. I am happy to see that the Fairtrade system is committing helping us confront climate change.