- One in eight people in emerging markets suffer from hunger and malnutrition.
- Agricultural insurance is an indispensable part of agricultural risk management and helps to smooth farm income as well as incentivise food investment.
- Agricultural insurance penetration in emerging markets is currently very low but potential premiums by 2025 can reach an estimated USD 15-20 billion.
Global agricultural production must increase by 60% to feed the world’s population, which will reach 9 billion by 2050. Swiss Re’s latest sigma research publication, “Partnering for food security in emerging markets” proposes a multi-stakeholder approach to address the problem of food insecurity, putting agricultural insurance on the table to help manage agricultural risks, stabilise farm income, and encourage agricultural investment to strengthen the food chain infrastructure.
Food security today means having physical, social, and economic access to sufficient, safe, and nutritious food.1 But steady population growth, insufficient farm investment, socio-economic instability, and adverse weather events remain key challenges to the world’s food supply, often barring people’s access to food. Moreover, dietary preferences and nutritional demand are changing and are also putting pressure on food production and availability. Recently, rising food prices have become a major concern due to a combination of complex factors.
“Volatile food prices (up 74% since 2005) and supply issues due to the 2012 US drought have heightened food security concerns recently, especially for vulnerable people in emerging markets,” explains Clarence Wong, Swiss Re Chief Economist for Asia. Out of the 850 million people suffering from hunger worldwide, 98% are located in emerging markets. The Asia-Pacific region has the greatest number (528 million), followed by sub-Saharan Africa (237 million).
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