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Cedric Stephens | Shielding vulnerable Jamaica from climate shocks

Jamaica was chosen as one of eight countries ‘most vulnerable to climate risks’ that will receive support from The Global Shield against Climate Risks, according to information on the Global Shield website:

Additional support may also be available from the Insurance Development Forum – IDF’s mission is to “optimise the use of insurance and its related risk management capabilities to build greater resilience and protection for people, communities, businesses, and public institutions that are vulnerable to disasters and their associated economic shocks”.

The Global Shield against Climate Risks is a joint initiative by the V20 or Vulnerable Twenty Group and the Group of Seven. The aim of it “is to strengthen the financial protection and resilience of vulnerable countries and people against climate risks”. This initiative is designed “to provide and facilitate more and better pre-arranged ( ex ante) protection against climate and disaster-related risks for vulnerable people and countries”.

One of the implicit goals of Jamaica’s National Natural Disaster Risk Financing Strategy 2021-2026 is the development and implementation of pre-arranged or ex ante protection instead of support in the past on ad hoc after the event or ex-post arrangements.

“The Global Shield against Climate Risks uses a toolbox of pre-arranged finance to close protection gaps in climate-vulnerable countries, following the principles of subsidiarity and ownership of partner countries. The new Global Shield Financing Structure, consisting of three Financing Vehicles, namely the Global Shield Solutions Platform, the Global Shield Financing Facility, and the Climate Vulnerable Forum & V20 Joint Multi-Donor Fund, can provide additional support, if needed.”

“The inclusive and participatory Global Shield In-Country Process aims to assess risks and needs of Global Shield partner countries to develop suitable support packages that close protection gaps and protect more vulnerable people against climate risks. The Global Shield also promotes regional approaches, addressing the most urgent protection gaps. The Global Shield against Climate Risks was launched at COP27, building on a joint effort by the G7 and the Vulnerable 20 Group, and contributes to international efforts to avert, minimize, and address climate-related losses and damage through better pre-arranged finance and resulting financial protection.”

In its initial phase, according to information posted on its website, Global Shield said it would start activities in eight pathfinder countries and one pathfinder region, namely Bangladesh, Costa Rica, Ghana, Jamaica, Malawi, Pakistan, The Philippines, Senegal, and the Pacific.

The excerpts from Global Shield’s website, in the case of Jamaica, are best understood in the context of the recent weather event, Potential Tropical Cyclone No. 22, that affected the island last November.

Official damage estimates to the agricultural sector, according to a Jamaica Information Service report, was $274 million. The Government committed to provide financial support of $157 million, 57.3 per cent of the losses, to help farmers recover.

Prime Minister Andrew Holness, according to a November 20, 2023, Gleaner article, identified some of the problems associated with the provision of government assistance. “The challenge is that the process of assistance might not (be in) sync with the cycle for farming. And again, the time it takes for allocation to approval to disbursement (of the financial assistance) might not sync with the time they (farmers) need to get it.”

An insurance plan was the subject of The Gleaner’s December 31, 2023, article, “Flood damage insurance payout gins up interest in microinsurance, says RADA”. It offers protection ranging from $50,000 to $1 million. Garfield Espeut, a 48-year-old farmer, whose 15 acres of tomatoes, peppers, and pumpkins were in the ground and ‘were almost completely submerged’ by flood waters, estimated his loss at $17 million. Livert Johnson’s 33-acre farm suffered a similar fate. His loss was probably twice that of Espeut’s.

Losses arising from a direct hit from a Category 3 or 4 hurricane on the Saffir-Simpson Scale, with wind speeds ranging from 111 to 156 miles per hour, would be substantially more than the $274 million that resulted from last November’s tropical storm.

The size and timing of government assistance, the combined losses of the two farmers previously mentioned, and the probability of future hurricane events of greater magnitude provide proof of what Global Shield’s sponsors call the ‘protection gap’.

The insurance protection gap is the difference between optimal insurance coverage and actual coverage in every country. The protection gap, in other words, describes uninsured losses. Jamaica has a big protection gap.

In ‘Can Jamaica emulate Rwanda’s success in agriculture? Yes, we can!’ published in this newspaper on May 29, 2022, I wrote that Rwandan farmers can expect to receive under that country’s crop insurance scheme up to 85 per cent compensation on the cost of their investment and their expected yield based on the average produced by their farms. The calculation factored in the cost of seed and inputs such as fertilisers in addition to historic levels of productivity.

“When Jamaican farmers suffer losses due to weather events, the Government acts as the insurer of last resort but without an explicit guarantee of what level of compensation they will get. Most farmers do not have access to insurance. Losses to the sector, on average, have historically amounted to two per cent of GDP per annum. Estimated crop losses from extreme events between 1994 and 2010 amounted to $12.6 billion. Government assistance to farmers comes from the Consolidated Fund. Disbursements from the fund between 2007 and 2012, according to Ministry of Finance and the Public Service data, amounted to $710 million.”

The Gleaner article concluded on an optimistic note: “The first phase of the pilot project, which could be a precursor to a local insurance scheme for farmers, was recently completed. It is hoped that with the naming of the island by Global Shield as one of eight countries that will receive support will place crop insurance for local farmers on a fast track for introduction.”

Prime Minister Holness spoke about resilience in his June 2018 statement to the Outreach Session of the G7 Summit in Quebec, Canada. According to the JIS, he said: “Building resilience is not optional. It is an imperative for our survival. Creative and innovative solutions must be found to design appropriate risk mitigation, risk transfer, and risk financing tools while ensuring wide participation in solutions.”

A programme to protect local farmers would be consistent with that argument.


Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to or

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