Climate risk management and rural poverty reduction

Climate variability is a major source of risk to smallholder farmers and pastoralists, particularly in dryland regions. A growing body of evidence links climate-related risk to the extent and the persistence of rural poverty in these environments. Stochastic shocks erode smallholder farmers’ long-term livelihood potential through loss of productive assets. The resulting uncertainty impedes progress out of poverty by acting as a disincentive to investment in agriculture – by farmers, rural financial services, value chain institutions and governments.