As climate variability gains prominence in the international policy agenda, public and private sectors alike are increasingly considering strategies to cope with its economic and social
consequences. In turn, the general public—faced with a growing number of extreme weather events and natural hazards—is beginning to demand concrete action. One sector where climate variability and its associated risk have the most damaging impact is the rural economy, in particular smallholder farmers. This brief outlines some of the adverse effects that climate variability has on the rural economy and
describes how different insurance mechanisms can contribute to reducing vulnerability and increasing resilience to weather risks.