Ottawa-Academic research on risk management and crop insurance has found producers think climate change has had major effects on agriculture that will likely worsen in the medium and long term, says Marie-Eve Gaboury-Bonhomme, a professor in the Agri-Food Economics and Consumer Sciences Department at Laval University.

Agricultural risks are uncontrollable events that are often difficult to predict and can have a negative impact on income, margins or agricultural production, she told the Commons agriculture committee. “A risk can be assessed based on three factors: the probability that an event will occur, the frequency with which it may occur, and the impact and duration of the effects it might have.”

In 2021, Gaboury-Bonhomme, who specializes in analyzing agricultural policy, and some colleagues began to research risk management and crop insurance in all sectors of agricultural production. So far, they have questioned more than 500 agricultural producers and 22 experts as well as examining what was being done in other Organization for Economic Co‑operation and Development member countries. The results of their studies will begin to be released this fall.

As the committee is interested in the effectiveness of insurance programs and looking for potential solutions for developing greater climate resilience, she suggested that it begin with looking at how agricultural risks are managed comprehensively at the farm level.

Farmers use a toolbox filled with mutually complementary strategies. “Agricultural managers make decisions that can enhance their resilience by averting some risks or reducing their frequency or adverse effects. That can be done by adopting certain practices such as diversifying production, irrigation, crop rotation, cultivar selection, improvements to soil health, and so on.”

Beyond that, certain risks must be transferred or shared because farmers cannot deal with them alone, she said. Government insurance programs do best if they are designed and implemented with a view to encouraging resilience through diversifying their risk management strategies, building up their toolkits, and ensuring they have the proper support and advice so they are able to incorporate innovations into their practices.

“There must be innovation and creativity so that insurance programs are designed to provide enterprises with good protection against climate risks. As well, they need encouragement to be resilient by adopting practices that benefit the environment and health.

“In our studies, the support available to enterprises emerged as a factor with a very significant influence on farm risk management. That support appeared to us to be particularly important given that almost half of the producers who participated in our survey assessed their level of knowledge of climate risks to be average.”

She said the use of pesticides should not be encouraged because they have adverse effects on human health and the environment. Instead, insurance programs need to encourage other practices to manage pests such as integrated pest management and other practices that are beneficial for water and air quality, ecosystems, biodiversity and greenhouse gas reduction.

The studies also showed production losses cause stress and worry, and even anxiety, in much of the agricultural population, she said. “It would be a good idea to expand the connections between mental health programs and insurance programs. This means that agricultural producers who have mental health problems will be able to get referrals to the services they need.”

This news item was prepared for National Newswatch