WFP Initiatives Expert Meeting Requirements of Weather Markets

WFP Initiatives Expert Meeting – Requirements of Weather Markets WMO December 5, 2007 Ulrich Hess, Chief of Business Risk Planning

AGENDA • WFP & WFP Strategy • Initiatives – WFP/IFAD partnership • China • Global Weather Risk Market Making – Ethiopia Phase II

WFP FOLLOW ON EFFORTS PRECURSOR EFFORTS RESPONSE IN EMERGENCIES INVESTING IN PREVENTION operations in 78 countries CORE TARGETED PROGRAMMES Budget of USD 2. 9 billion 88 million people assisted 4 million tonnes of food HANDING OVER TO PARTNERSHIPS HAVING THE BEST ANALYTICAL AND OPERATIONAL TOOLBOX AVAILABLE TRANSFERRING SKILLS AND KNOWLEDGE TO COUNTRIES

ETHIOPIA PHASE II 7. 3 Mil Safety Net Beneficiaries Insurance Occurrence (no. of years) Productive Safety Net Contingency Grant/Fund/WFP CEMOP 6. 7 Mil Livelihood Protection Target Beneficiaries Drought severity – Early Livelihood Protection costs (Mil Euro) Flash Appeal

WFP/IFAD GLOBAL WEATHER RISK MARKET MAKING • Core team of Experts & Market Makers • Create Global and national public goods that enable weather risk markets – Weather Data (real time+historical) & Weather Data Infrastructure – R&D – Technical Assistance for demonstration projects • Crowd in Weather Risk Takers

Support Levels

Vision: From small contracts…

…. for small farmers…

…to large safety net contracts… 8. 3 Mil Safety Net Beneficiaries Insurance Occurrence (no. of years) Productive Safety Net Contingency Grant/Fund/WFP CEMOP Flash Appeal 7 Mil Livelihood Protection Target Beneficiaries Drought severity – Early Livelihood Protection costs ($US Mil)

…protecting vulnerable households!

HENCE: LARGER SHARE OF NON-OECD CONTRACTS …. Distribution of total number of contracts by region 2000 -2007 20082011

…AND SIZABLE NON-OECD MARKETS! 20082011

China • Go. C/IFAD/WFP Weather Index Insurance Feasibility Study – Flood Index based Protection – Drought Index Insurance • Demonstration and replication effects

CONCLUSION: Weather Index based risk transfer is important. . • Destitution • Dignity • Risk financing Cost • Climate Change

THANKS! • Ethiopia LEAP Tool download: http: //vam. wfp. org/LEAP Free software download. Please do not distribute without consent of WFP and World Bank • For questions: ulrich. hess@wfp. org,