SEADRIF and FAO push for Southeast Asia Agricultural Risk Finance Facility

The Southeast Asia Disaster Risk Insurance Facility (SEADRIF) and the Food and Agriculture Organization of the United Nations (FAO) have reportedly collaborated with six ASEAN nations to explore options for creating a Southeast Asia Agricultural Risk Finance Facility.

According to SEADRIF, climate shocks threaten Southeast Asia’s agrifood systems, where more than one-third of the workforce depends on farming for their livelihood.

However, despite agriculture’s critical role in ASEAN’s economy and food security, SEADRIF observed that only 3% of global climate finance reaches this sector, underlining an urgent need for transformation in managing climate risks.

“Achieving this requires access to data, models, and specialized expertise to reduce transaction costs and streamline access to domestic and international insurance and reinsurance providers. Additionally, the affordability of premiums and the right cost-sharing between the insured and public support remain key concerns,” the SEADRIF explained.

During the 10th-anniversary event of the ASEAN Climate Resilience Network (CRN), representatives from six ASEAN countries, along with regional stakeholders, reportedly agreed to explore the establishment of the Southeast Asia Agricultural Risk Finance Facility.

With funding support from the Green Climate Fund (GCF), this initiative aims to serve as a potential sectoral mechanism under SEADRIF.

“As the key disaster risk finance platform mandated by ASEAN+3 finance ministers to enhance resilience across Southeast Asia, including through agricultural risk finance, SEADRIF will explore ways to provide the operational home for implementing such a Facility,” SEADRIF said.

Both SEADRIF and FAO will conduct a pre-feasibility assessment and work with countries to align on vision and objectives.

“The study will assess gaps, needs, and appropriate implementation arrangements and funding flows to unlock and inform climate finance investments into this critical area of strengthening the resilience of agriculture in the region,” SEADRIF concluded.

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