Tackling Climate Change and Food Insecurity: Challenges and Opportunities for EAC Arusha - Feb 23rd, The Kilimo Trust: regional solutions to local problems Presentation at the Inception Meeting of the PACT-EAC Project Nuhu Hatibu; CEO – Kilimo Trust Presentation at the Inception Meeting of the PACT-EAC Project Nuhu Hatibu; CEO – Kilimo Trust Putting Our Abundant Water Resources to Work Total Renewable Water Resources (Km 3 /year) Tanzania = 96 Uganda = 66 Kenya = 31 Burundi = 13 Rwanda = 10

… because, the main impacts of climate change on food security and economy … occur through water Arusha - Feb 23rd, The Kilimo Trust: regional solutions to local problems For example, GDP Growth (%/annum) in Tanzania

… another example of impacts …through water.. Arusha - Feb 23rd, The Kilimo Trust: regional solutions to local problems Damages to infrastructure, and economic loses in Kenya After – the UN World Water Development Report 3 – pg 70-71

BUT, the Problem is the LIMITED Infrastructure to Manage “Water & its Variability” …  Installed capacity in SSA is about 500 m 3 per capita - USA or Australia have more than 5,000 m 3 per capita;  Of the world’s 45,000 large dams, only 1,000 (2%) in SSA; Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 4 For example, it is the lack of storage, that makes the abundant water resources (and its variability) - a cause of misery rather than – the water itself

… therefore LIMITED Infrastructure is very costly … and will become worse with Climate Change For example, in Japan, heavy investment in infrastructure since the 1970s has reduced annual economic losses due to floods from 20% of GNI, to less than 0.5%; and Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 5 However, Heavy investment in developed countries shows high returns - which proves that investment pays In the USA, many of the largest federal infrastructural investments have been on water control, storage, management and abstraction.

… one consequence is that, most of our God- given “free” Rainwater Go to Waste!  Rainfall total in the EAC is about 1,750 Km 3 per year; or  About 13 m 3 per person/year; But  Most of this water is lost to evaporation or flow to the oceans Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 6

… so, Adaptation of Food Security to CC, requires as the 1st priority, the management of rainwater on the farm WHY? The soil provides the largest “free” water storage infrastructure; Compared to Irrigation, RWH and SWC can be implemented virtually everywhere; and Adoption of SWC in the USA made the largest single contribution (45%) to the increase in average wheat yields from 750 kg/ha to 1,800 kg/ha from 1936 to This was ahead of improved varieties (30%), other equipment (20%) and fertilizer practice (5%). Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 7

… also, Expand, Improve its Efficiency, and Adapt to CC, conventional irrigation Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 8

… plus, for Adaptation to CC, expand use of modern inputs to reduce water requirement for food production Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 9

… for serious Adaptation of the Economy, to Climate Change; we require … Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 10 Necessary and Sufficient Water Control and Storage Infrastructure (with integrated water use) that is adapted to the anticipated climate change

…BUT, we also require regional markets and trade – for sustainable Food Security Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 11 Because, the world market for food is very thin …

…Because…  Food self-sufficiency and/or command and control, is a human trait;  That is why “land-grabbing” is as old as human civilization – although it has nothing to do we land – but rather a lot to do with water! Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 12

… and because it would very costly to achieve 100% adaptation to climate variability & change To transfer some of the Risk to the Global Insurance Industry; because Potential for weather- indexed agricultural insurance is expanding as the OECD countries shift from direct agricultural subsidies, to subsidies for agri- insurance Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 13 We need a robust weather-indexed insurance

…however, there are serious challenges … 1.Very low trust in insurance; 2.Difficult to make index-insurance; comprehensible to the never-before insured; 3.Limited “livelihood-focused” indexes 4.Inadequate historical data for rating the selected indexes; leading to 5.High basis-risk (poor correlation (r 2 < 90%) of index and actual losses). Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 14

… which require serious work, including to: … Create informed demand (increase awareness, acceptability, and willingness to pay); Ascertain the availability and quality of data; Build necessary capacities, databases and models; Create a proposition of real value to the insured; Integrate agri-insurance onto a wider package of agricultural services – and make it regional wide; Engage the private sector to graft onto existing delivery channels; and Establish enabling legal and regulatory frameworks. Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 15

… otherwise… Pilots die as pilots; and Anybody who tells you that she can offer index agri- insurance at short notice and without the necessary investment – is deceiving you! Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 16

In summary and conclusion It is essential that: – all decision-makers in the EAC, from – farmers in their fields to the highest Council of Ministers, are – aware of the need, and – have the capacity to improve innumerable climate-sensitive decisions, through – effective risk reduction investment, actions, and management. We are pleased that PACT-EAC will be working on this, but more dedicated action is required. Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 17

THANK YOU! For more information & follow-up, please visit Arusha - Feb 23rd, 2012 The Kilimo Trust: regional solutions to local problems 18