Ecological and financial strategies provide complementary benefits for smallholder climate resilience: insights from a simulation model

Authors: Tim Williams*, University of Michigan - Ann Arbor, MI, Gunnar Dreßler, Helmholtz Center for Environmental Research, Anne Elise Stratton, University of Michigan, Birgit Müller, Helmholtz Center for Environmental Research
Topics: Coupled Human and Natural Systems, Agricultural Geography, Hazards and Vulnerability
Keywords: agriculture, legume cover cropping, microinsurance, resilience, simulation modeling, smallholder agriculture, social-ecological systems
Session Type: Virtual Paper
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Researchers and development organizations regularly grapple with competing ecological and financial strategies for building climate resilience in smallholder agricultural systems, but rarely are such approaches considered in tandem. Using a social-ecological simulation model, we explore how different combinations of legume cover cropping—an “ecological insurance”—and index-based crop insurance—a “financial insurance”—affect the climate resilience of mixed crop-livestock smallholder farmers over time. The model simulates interactions between soil nutrient dynamics, crop yields, and household wealth, which is carried solely in the form of livestock. We assume cover cropping increases soil quality and productivity over time through biological nitrogen fixation, whereas microinsurance gives payouts in drought years that provide ex-post coping benefits. Our model results indicate that the benefits of cover cropping to mean household income strongly complement the shock-absorbing benefits of microinsurance. Specifically, we find: (1) insurance always provides larger benefits during and in the wake of a drought, while cover cropping progressively reduces poverty in the medium- to long-term; (2) the use of crop insurance solely as an ex-post coping strategy may not reduce the incidence of poverty; and (3) legume cover cropping offers larger relative benefits in more degraded environments and for poor farmers. These results underscore the complementary roles that ecological and financial strategies could play in building resilience in smallholder agricultural systems. The stylized model constitutes an important social-ecological foundation for future empirical research to inform agricultural innovation and sustainable development priorities.

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