Feeding a growing planet
Food security remains a stubbornly persistent problem, says Clarence Wong, and re/insurance can make a vital contribution.
Clarence Wong photographed at
his office in Hong Kong
Clarence Wong: When you see Swiss Re helping farmers in India, or providing area yield cover for agribusiness in South Africa, Thailand, and Vietnam — or originating catastrophe bonds on behalf of US farm bureau insurers — this isn’t just a side business. Food security is a critical issue for the future. And re/insurance has a central role to play.
The global population has doubled to seven billion people in the last fifty years and is projected to reach nine billion by 2050. Most of this growth will be in emerging markets. Improved agricultural techniques have brought ever more people out of hunger, but the challenge remains.
Just to keep up with our growing population, world agricultural production will have to rise by as much as 60% between now and 2050 — a period in which a changing climate will bring ever more frequent and severe weather events.
“Just to keep up with our growing population, world agricultural production will have to rise by as much as 60% between now and 2050 — a period in which a changing climate will bring ever more frequent and severe weather events.”
Chief Economist Asia
This year saw severe drought in the main grain-producing regions of the US and Russia — in the case of the US, the worst in fifty years. Global food prices have risen by 74% since 2005, reflecting the insecurity of supply. Emerging markets, increasingly seen as the main drivers of global economic growth, are particularly vulnerable to inadequate food resources. Re/insurance can make a vital contribution to addressing this global problem. Insurance helps to promote investment, stabilise farm income, and manage risks in the agricultural value chain. All these things are fundamental to sustaining a healthy world food system.
We address the specific needs of the agricultural sector through single and multi-peril crop insurance, parametric index covers, area yield covers, micro-insurance products and public-private partnerships. Many solutions, but the aim throughout is simple: to reduce uncertainty, cushion the impact of disaster, provide for future investment, and help secure the world’s food supply.
Clarence Wong is Chief Economist Asia, based in Hong Kong. He has been with Swiss Re since 1999. Clarence has authored several studies on regional and international trends in insurance. He participates in a wide range of research and consulting projects on the relationship between the general economy, capital markets and the insurance and reinsurance markets. His latest sigma study, “partnering for food security in emerging markets,” is available on swissre.com/sigma.