Munich Re, Monsanto, and insights from a Norwegian post-doc

This afternoon I made a rather happy discovery as my inexpert mind attempted to digest the recent announcement that reinsurance giant Munich Re plans to collaborate with Germany's Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Peruvian government to develop an insurance system to mitigate climate risk for the country's agricultural industry.

That itself wasn't the happy discovery. I'll get to that. First, I'll do the pros and cons of the announcement.

Incan grain storage, Ollantaytambo

I fully expect that a government-sponsored agricultural insurance program is welcome news to the many farmers who've been puking from the cars of the climate change roller-coaster this past decade. In November 2011, Lima-based Centro de la Mujer Peruana Flora Tristán organized a Gender and Climate Justice Tribunal in Cusco that yielded frosty testimony about the disruptive effects of weather anomalies in the Andes. Reports from the event underscore the havoc random weather has already inflicted on the livelihoods and well-being of small-scale Peruvian farmers.

The last decade, in the District of Chuquibamba, in the province of Condesuyos, comes bearing frost weather and sharp drops in temperatures at any time of the year. This phenomenon results in ever worse havoc on the production efforts of Maria Ibárcena, who cultivates flowers and fruits sold in the market for the family economy. Her situation is very difficult since the harvest of flowers can end abruptly by being "burnt" by the excessive cold, and fruits are diminished. Currently, she and other cultivators take only 20 percent of the planting in comparison to previous seasons. Agricultural activity is their means of livelihood.  

In addition, the increase in pests increases their production costs. Maria has not only economic loss, but faces the mistrust of customers because she cannot fulfill the orders. The anxiety, concern and uncertainty are emotions that co-exists with the cold on a daily basis. Her mental health is affected and lack of confidence settles in. She combats depression due to the contradicting fact that she is both working but not achieving the expected results. 

(for a full account, go to the Gender and Climate Justice Tribunals blog)

I looked but couldn't track down details of what the risk management program (poetically named "Integrated Financial Management of Climate Risks in Peru’s Agricultural Sector") will actually entail, but if it works anything like government-subsidized agriculture in the United States, the policies will reimburse farmers for some or all of their lost income when adverse environmental factors destroy their crops. Free of some of the "anxiety, concern and uncertainty," those farmers will presumably keep farming and not abandon what has been a growth industry for Peru in recent years.

That sounds good. However, climate insurance will come at a definite cost to Peru, a cost that will quickly mount as more adverse events come to pass. And at some point, as issues of water scarcity become impossible to ignore, the risk may become uninsurable (like flood risk in Florida), even if those seeking and offering insurance have the best intentions. With insurance, too, come the demands of reimbursement stipulations, specifically that farmers use specific agricultural practices (seeds, methods, timing, etc.) that entail the least risk, which may not be the practices farmers want or need to use. Obligatory compliance with best practices drives uniformity, and while uniformity in certain disciplines (e.g., medicine) is a noble objective, in agriculture, not so much, particularly when faced with the definite uncertainties of climate change.

So the immediate import of this news stumped me. I wasn't sure whether to be happy for stressed-out small farmers or concerned that Peruvian agriculture was getting boxed in by a government keen to continue stoking economic growth and attracting international investment. What would the policies cost? Would small farmers even benefit, assuming the program was primarily intended to support large-scale export agriculture? Would farmers be required to grow GMOs?

In the hunt for these answers, I stumbled across a fascinating, highly enlightening interview with Astrid Bredholt Stensrud, a post-doctoral researcher in the Department of Social Anthropology at the University of Oslo. Dr. Stensrud's my happy discovery. She's in the thick of it, gathering first-hand accounts of this push-and-pull dynamic between domestic/international macroeconomic forces and the needs of individuals in various Peruvian communities. At the outset, the January 2014 interview confirms what Cassie and I were already suspecting to be the case when it comes to small-scale farming in the Andes.

Small-scale farming is not profitable; it’s practically impossible to make a living out of it. So many farmers find alternative incomes (temporary work in the cities, tourist-related businesses etc), and rent their land to farmers who make more large-scale investments, and who try to combat the climatic challenges with the use of chemicals. The ideal for many people in Chivay would be to have a business to rely on, and at the same time to cultivate your own food in your own field, and some people do this as well.

Given that perspective, I have to assume that the Munich Re/GIZ program is intended primarily to help those large-scale farmers using chemicals to boost crop yields and fight pests. But are those same farmers using GMOs? Does this confirm the worst fears of the Quechuan agriculturalists who shipped their native potato seeds to the Svalbard Doomsday Seed Vault in the Arctic Circle?

Peru passed a law in 2011 that prohibits the import of GMOs during a moratorium period of ten years. The intention is to protect the biodiversity in the country and allow more research on the topic. However, critical voices claim that the law is not respected, and I have heard rumours about GMOs in Majes/Pedregal. In 2005, Monsanto bought the Peruvian seed company Seminis, so they are already an actor in the Peruvian market.

So by law, GMOs are out of the question until 2021, but that bit about Monsanto already owning part of Peruvian seed market is creepy, especially when you consider the country's poor track record on consulting indigenous groups on dam projects and preventing illegal mining. At least the new insurance program cannot legally require the use of Monsanto's seeds.

Norwegians are all over the genetic uniformity problem

Where does that leave Peruvians?

Reading the Peruvian newspapers, there is still a lot of optimism due to economic growth in the country and a general decrease in poverty. But this optimism is based on projections of growth that has a terrible drawback, namely environmental degradation from the extractive industries and increased social inequality. In Caylloma province, people in local communities protest against mines because they fear contamination, but at the same time they desire the material benefits they can get from the mining companies, like new roads, schools and other social projects. There seems to be a thin line between “corporate responsibility” and attempts to “buy people off” [emphasis mine]

Dr. Stensrud's doing extremely valuable work, and I heartily recommend everyone go read all of her interview. She doesn't know it yet, but Cassie and I have made her an honorary member of the Cusco Running Club. Maybe we'll get the chance to meet her before we leave the country. In the meantime, I'm going to see if I can track down more of her work and learn more answers to the questions I've been asking.