Improvement of Agricultural Climate Risk Zoning prevents agricultural losses

Avoiding agricultural losses caused by adverse weather conditions is one of Zarc's main purposes

29.11.2018 | 21:59 (UTC -3)
Nadir Rodrigues

The tool that guides rural producers on the best time to plant and sow crops is an instrument of agricultural policy and risk management in agriculture that has been constantly improved with technology and qualified information.

Embrapa estimates that the savings generated will exceed R$1,5 billion per year, according to the Social Report published by the Company. Since 1996, when Zarc was created, it has been estimated that the national treasury has saved R$13,6 billion. Therefore, continuous updating of the methodology and the incorporation of technological resources are essential.

To discuss how to improve the methodology and incorporate new risk factors, experts from the Ministry of Agriculture, Livestock and Supply (Mapa), Embrapa and representatives from the productive and financial sectors met in a workshop held at Embrapa Informática Agropecuária (Campinas, SP) , from November 21st to 23rd. The event was attended by around 70 people who carry out research or use technology.

Zarc guides producers and financing agents regarding the most suitable and least vulnerable times to plant, generating greater security for agricultural insurance operations. The Agricultural Activity Guarantee (Proagro), Agricultural Activity Guarantee of Family Farming (Proagro Mais) and Rural Insurance Premium Subsidy (PSR) programs from the federal government consider Zarc as one of the mandatory requirements for taking out insurance. and risk mitigation in credit taking. Several financial agents also make the granting of rural credit conditional on compliance with Zarc's directions.

In the 2017/2018 Harvest Plan, the federal government provided R$188,4 billion in agricultural credit lines, with R$150,2 billion for funding and R$38,1 billion for investment. Proagro totaled R$14,7 billion in protected capital, according to the Central Bank, and rural insurance, R$12 billion, according to information from Mapa's Agricultural Policy Secretariat. In the period from 2015 to 2017 alone, there were compensation payments of around R$3 billion by the federal government, relating to the Proagro and Proagro Mais programs.

Risk assessment

“The most relevant agroclimatic risks for agricultural production are water deficiency, frost, rain during harvest, very high temperatures, excess water, windstorms and hail”, explains Embrapa Informática Agropecuária researcher Eduardo Monteiro, coordinator of the agrometeorological risk assessment network. from Embrapa. To carry out the studies, researchers carry out surveys, organization and processing of data obtained by a network of institutions distributed throughout Brazil, modeling and simulation of various cultures, spatialization of results and, finally, validation with evaluations carried out with representatives of the productive sector.

The main results obtained in 2018 were the topic of the meeting in Campinas. Embrapa Grape and Wine researcher Marco Conceição presented the new criteria used for zoning grape production. The methodology used, which considers the characteristics of the climate, soil and culture in the region, was validated by technicians and producers in the state. Another update addressed the criteria for classifying climate risks for bananas, including the Cavendish, apple, and silver/earth groups. Banana production in Brazil in 2017 was 6,6 million tons, with São Paulo, the main producing state, accounting for 16% of this cultivation. Maurício Coelho, researcher at Embrapa Mandioca e Fruticultura, showed the modeling work carried out, with the review of parameters throughout the crop cycle, from planting to harvest.

An innovation for the 2018/2019 harvest is the Agricultural Risk Zoning of Climate Productivity (Zarp), which incorporates more climate variables and opens up possibilities for generating risk zoning for different expectations or expected productivity. Zarp for irrigated rice in Rio Grande do Sul (RS) was the topic of a lecture by Embrapa Climate Temperado researcher Silvio Steinmetz. This zoning is generated from SimulArroz, a model that simulates the development, growth and productivity of rice in flood irrigation systems in the regions of Rio Grande do Sul.

The soy Zarc was also revised for the states of Santa Catarina (SC) and RS. Gilberto Cunha, researcher at Embrapa Trigo, highlighted the importance of updating this, which was the first crop to be zoned in the country. Cunha also highlighted data on wheat production, whose concentration is in the states of Paraná, RS and SC, which produce 85 % of the grain. In the last five years, there were losses of R$390,5 million in Proagro contracts with wheat. Part of the losses arise from adverse weather events; however, another part may be caused by inadequate management. Therefore, some additional measures are being evaluated to reduce the occurrence of losses in this crop.

The validated results for Phaseolus beans, considering risk levels of 20%, 30% and 40%, were presented by researcher Silvando Silva, from Embrapa Arroz e Feijão. And Embrapa Informática Agropecuária researcher Luis Barioni showed studies of climate risk in pastures for animal production. The pasture productivity model is associated with a forage budget model and allows estimating the risk for different combinations, indicating the need for food supplementation. The methodology for other crops such as peanuts, cocoa and cactus were also reevaluated and their zoning updated.

Industry demands

All of these updates bring significant gains, both for the rural producer, the government and the agricultural insurance sector. “But it is necessary to advance an institutional arrangement to leverage more resources for Zarc. It is also very important to align the generation of information between the different institutions, both to meet the demands of producers and those of the financial sector, with the participation of Embrapa”, believes researcher Aryeverton Fortes de Oliveira, from Embrapa Informática Agropecuária.

The Zarc network coordinated by Embrapa between 2015 and 2018 includes the participation of 31 research centers, which have already zoned 16 crops. During this period, the team of researchers saw growing demands for the incorporation of new products or services linked to technology. The main ones are quantification of productivity risks, inclusion of new risk factors and other cultures and production systems. There is already a history for 44 crops or production systems with Zarc published by Mapa; however, there is currently a demand for more than 100.

Representatives from Mapa, the Central Bank, the Brazilian Agriculture and Livestock Confederation (CNA) and the National Federation of General Insurance (Fenseg) participated in a round table, which took place on November 22, to specifically address the demands of the risk management sector . The director of the Risk Management Department, of the Mapa Agricultural Policy Secretariat, Marcelo Guimarães, highlighted the importance of the technical cooperation agreement with Embrapa for the maintenance and updating of Zarc. “It gives great security, peace of mind that the technical issue will be taken to its fullest in relation to zoning,” he stated.

The National Program for Strengthening Family Agriculture (Pronaf) financed R$22,3 billion in the 2017-2018 harvest. For José Carlos Zukowski, general coordinator of Risk Management and Rural Insurance at the Subsecretariat of Family Agriculture of the Civil House, “it is necessary to have the support of risk management tools, as without the appropriate tools these programs cannot be sustained”. He also spoke about the need for the development and evolution of technological resources that support government programs for agriculture.

One of Proagro's needs, in the view of Clóvis Marcolin, Proagro Management Coordinator at the Central Bank, is the incorporation of monitoring systems into inspection. Pedro Loyola, president of the CNA Agricultural Policy Commission, emphasized the economic importance of rural insurance for the country and the impact on agricultural production. He defends the creation of a communication channel with Embrapa's network of researchers to send field demands.

Risk management strategies were addressed by the technical director of rural insurance and Fenseg representative, Paulo Hora. According to him, the area covered by agricultural insurance represents 14% of the grain plantation in Brazil. In 2017 alone, there were R$820 million in compensation for claims. “Zarc is a fundamental risk mitigation tool for the market and the producer”, highlighted Hora, highlighting the need to incorporate other climate variables into the models.

For the general head of Embrapa Informática Agropecuária, Silvia Massruhá, the workshop was an opportunity to integrate the various actors involved in the Zarc process, enabling discussion about new demands and products. “It also made it possible to discuss financing alternatives that could subsidize a permanent climate risk agricultural zoning program that includes scientific advances, in addition to operational actions to update zoning,” she said.

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