Michel Kerf, World Bank Director for Central America and the Dominican Republic, stated:At the World Bank, we recognize the need to enhance the financial resilience of smallholder farmers and vulnerable households affected by increasingly severe and frequent climate-related disasters in North Central America.
Our global and regional experience has demonstrated the value of strong partnerships between the public and private sectors to design and implement effective disaster risk financing solutions.Lola Castro, WFP Regional Director for Latin America and the Caribbean said:Together we can support Central American smallholder farmers to mitigate risks related to climate shocks through scalable and sustainable transformation.
Disaster Risk Finance is an innovative way to help smallholders effectively manage risks and reduce vulnerabilities so they can transition to sustainable food and nutrition security.Agriculture is a key part of the economy of North Central America and key source of income and food security for poor and vulnerable populations there.
From this, initial discussions were held in 2022 from the development of risk finance solutions for large-scale disasters, in order to improve the financial resilience of family farmers in the NCA countries (El Salvador, Honduras, and Guatemala).
The organizations that were participants in this initial discussion were:[5] On November 16, 2022, the PCA, the WFP, and the World Bank Group launched the Disaster Risk Insurance and Finance in Central America Consortium (DRIFCA) during the United Nations Climate Change Conference (COP27).