On the sandy soils of the Padma River in central Bangladesh, Salma Akhtar, 35, grows maize and onions to feed herself and her school-aged daughter.
But each year, at least once between May and October, floods erupted in her village in Faridpur district, wreaking havoc on the single mother’s crops and homes.
Similar to Akhtar, more than four-fifths of Bangladesh’s rural population are facing more intense and frequent climate-related disasters as the planet warms, according to a 2022 study by an international organization. They spend an estimated US$1.7 billion a year rebuilding their shattered lives. Environmental Development Institute.
Local and global organizations are testing new approaches such as grants, loans, insurance and green bonds to get more financial support so that poor families can better protect themselves.
For example, Akhtar recently received a small grant from the international development charity Practical Action to raise the plinth of his home to a level that floodwaters cannot easily reach.
The program is part of the Zurich Flood Resilience Alliance, an international collaboration that aims to minimize losses to poor households by providing funds when they are needed most – before, during and immediately after floods. It is done as
Early warning systems are another important way to help communities minimize disaster risk and prepare for extreme weather events.
The World Meteorological Organization said this month that early warning has played a major role in reducing deaths from recent disasters, while economic losses have soared.
Bangladesh has a national-level early warning system for disasters such as cyclones and floods.To enhance the resilience of people on the ground, Practical Action has implemented a local information dissemination system. Developed.
This includes weather-related information displayed on electronic boards in municipal government buildings and telephone voice messages sent in advance of potential threats such as floods.
Practical Action also trains volunteers, including Salma Akhtar, to raise awareness of disasters and protection measures among community members, including women.
Volunteers are holding neighborhood meetings to show villagers how to raise their homes and build goat sheds on higher ground to keep property and animals safe during floods.
In addition, Practical Action is considering an insurance program to reduce risks for Bangladeshi farmers.
Colin McQuistan, head of climate and resilience at Practical Action, says that for insurance to work, alongside measures to limit losses, it is necessary to “have a clear understanding of the risks and impacts of floods on farmers’ crops.” I need to,” he said.
insure the crop
Across the border in Nepal’s lower Karnali region, Sarina Choudhary, 28, a farmer, cultivates a small plot of land where she faces seasonal floods whose damage is increasingly expected. becoming impossible.
Last year, under a new policy for farmers launched by Practical Action, her crops were insured for the first time and she received benefits to cover damages when floods occurred.
Practical Action has designed small-scale climate insurance to be affordable. In the pilot phase, premiums were fixed and partially subsidized based on farmers’ ability to pay.
Fast and transparent payments are also necessary to make insurance attractive to farmers. In Nepal, funds are released within days after the government’s Department of Hydrometeorology issues a flood notice.
Dhaka-based International Center for Climate Change and Development (ICCCAD) Director Salimul Huk said the insurance industry could help pay for losses and damages caused by climate disasters.
He said ground-level efforts could work in tandem with larger schemes like the Global Shield Against Climate Risks. The plan brings together a group of 58 climate-vulnerable countries and the wealthy G7 countries to mobilize insurance and other resources.
“Governments and donors can subsidize climate-related insurance premiums, and when disaster strikes, these insurers can pay insurance claims to farmers and victims,” he added.
Other private organizations operating in Bangladesh are also piloting climate insurance, especially for agriculture.
Tanvir Rahman Daly, head of comprehensive finance at KM Dastur, an international insurance brokerage and risk advisory firm, said the company designs different types of climate-related insurance.
There are dozens of companies offering insurance products in Bangladesh, but “we have not entered climate change insurance or agriculture insurance because of the low feasibility,” he said.
As climate hazards become more severe and more frequent, insurance premiums are rising around the world, disproportionately impacting vulnerable households.
KM Dastur hopes to find a solution adapted to the economic realities of poor and vulnerable farmers, Darley said.
The company partners with multiple microfinance institutions to serve 4-5 million people through a combination of microloans and insurance, while advising farmers on how to care for their crops and livestock for the best results. are doing.
Its partners include the SAJIDA Foundation, a non-profit organization that seeks to bridge climate change adaptation through green investment and microfinance projects by the private sector.
Last year, the company launched Bangladesh’s first green bond, raising Tk 1.1 billion (US$10.3 million) from a private organization and using it to make small loans to farmers and poor families in 36 districts where it operates.
One of the beneficiaries, Nurul Hak Byapalli, who grows several acres of rice, onions, garlic and other crops, said the loan had suffered losses after this year’s hail storms damaged his paddy fields. said it helped cover
Sardar Akhter Hamed, head of microfinance at the SAJIDA Foundation, said Bangladeshi companies are being encouraged to invest in green bonds as a result of government tax cuts.
ICCCAD’s Huk noted that Bangladesh is set to move from the least developed country category to developing country by the end of 2026, so it will no longer be eligible for foreign aid for the poorest countries.
“When we graduate, we will need to explore not only global financial markets but also the local private sector to mobilize green finance,” he added.
Obstacles for the Poor
But as development agencies roll out climate-related insurance and microfinance, experts question how much of it will actually benefit the poorest.
Gohar Naeem Wala, founder and executive director of the Bangladesh Disaster Forum, said one of the obstacles is that most farmers are landless and grow crops on land owned by others under contract agreements. said that.
Modern equipment like the combine mostly belongs to the wealthy, and poor farmers can sell their crops for cash, but receive little benefit from technology, bank loans or post-disaster aid, he said. said.
“Everything goes to the owner, not the actual farmer,” Warra added.
There are at least four million landless people in rural Bangladesh. Among them is Sumi Akhtar, 25, who, along with her husband and in-laws, have been forced to move three times in the past three years due to flooding and riverbank erosion.
The family has relied on microfinance loans to continue rebuilding their home, but Akhtar said the interest rates are high for people like her, around 25-27%.
Warra and other experts said such loans, along with microinsurance, should be subsidized by governments, aid agencies and others, and could be offered at low to zero interest rates.
Akhtar said her family suffers from annual floods that deposit alluvium on the land, making it more fertile and reducing the need for expensive fertilizers and irrigation.
“But we need help to deal with the damage,” she stressed.
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