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Business Recorder
26-05-2025
- Business
- Business Recorder
Climate hits the pivot — the way forward in agri risk management
The devastating storms that wreaked havoc across Punjab on May 24, 2025 are a blunt reminder of our agriculture sector's vulnerability in the wake of intensifying climate crises. The extensive damage to crops, high-value irrigation systems, and power supply infrastructure highlights the pressing need for a concerted effort towards building a robust agricultural risk management framework. This disaster was not a standalone event, as it is linked to a systemic worsening of the national climate in recent years. 2022 saw calamitous floods that inundated vast belts of Punjab's agricultural land, while the 2024 heatwave severely impaired seedling emergence across a range of vulnerable Kharif crops, including sesame, which holds rising potential for export to China. These recurring weather hazards have exposed the fragility of our preparedness to anticipate and effectively cope with adversity. One fundamental gap lies in the absence of a comprehensive, transparent, and technology-enabled insurance framework, which is customized to overcome the climate vulnerabilities of our agricultural sector. Seeking interventions for structured risk management reforms has become increasingly crucial with the evolution of industrial agriculture that the country has seen over the last half a decade. These corporate farms, with valiant investments in technology and scale, bear an excessively high exposure to potential climate-related losses, which requires urgent attention to sustain investment momentum in this emerging sector. One tested solution lies in replicating cutting-edge insurance systems that have successfully worked in the west. These systems are privately owned but rigorously overseen and subsidized by the government to ensure uptake, transparency, and efficient processing of claims. The US government's Federal Crop Insurance Programme (FICP) is a working demonstration of a delivery model that augments the perks of private sector efficiency with government sponsorship and oversight. FCIP leverages a network of actively regulated private insurance companies authorized by the United States Department of Agriculture's Risk Management Agency. The programme offers a range of insurance products, which include coverage against multiple perils, including crop losses due to bad weather. There are separate policies, other than the ones offered under FCIP, which offer comprehensive insurance against damage to farm property, infrastructure, and irrigation systems. The government often subsidizes on average up to 60% premiums which has encouraged widespread uptake and resulted in significant loss mitigation. Use of satellite-based remote-sensing analytics combined with extensive in-situ weather monitoring has enabled insurance providers to minimize delays and disputes, and reinforce participation. Likewise, the Australian government supports a private sector-led drought insurance programme, which uses undisputed weather indices instead of traditional actuarial frameworks, to determine payments or regulate disbursements. This allows the farmers to quickly reinvest and bounce back from climate shocks. Similar to the US model, this programme also involves use of multiple-source sensor data to enable quick and transparent claim processing. In other words, according to the Department of Primary Industries and Regions, the Australian government's support includes programmes that offer funding and resources to help with drought preparedness and resilience. Furthermore, to act as a unified voice for successful risk mitigation, the industrial agriculture companies should organize into a dedicated association or a collaborative platform. This would enable coordinated interactions with authorities and other stakeholders to advocate and undertake pressing risk management reforms. Such an outlet would also ensure that the evolving needs of these large-scale farms are adequately represented and the risks arising from their scale and process complexity are hedged. This writer's own losses in the May 24 storm which include damage to center pivot system, farm power supply infrastructure, and standing crops are an agonizing testament to the dangers of climate risks, which have led to setbacks with lasting financial consequences. The recent devastation in Punjab emphasizes the criticality and urgency of these and other measures, which are aimed at integrating resilience and protecting crops, machinery, infrastructure, and human life from the recurring climate offensive. Development of a comprehensive and transparent risk management framework, enabled by proactive and generous government backing, reorientation of private insurers toward adoption of fact-finding technology, and a unified industry voice, is indispensable to the sustainability and modernization of our agricultural ecosystem. (The writer is the CEO and Founder of an industrial agriculture company, which specializes in technology-driven desert agriculture on a corporate scale) Copyright Business Recorder, 2025
Zawya
01-05-2025
- Business
- Zawya
South Africa: How local SMEs can capitalise on cross-border e-commerce?
The rise of cross-border e-commerce trade is unlocking new opportunities for South African businesses eager to expand their reach and revenue. With cross-border transactions already accounting for approximately 31.2% of all global online sales and projected to grow 219% faster than global e-commerce as a whole through 2028, the market is expected to reach $5.06tn in sales within the next three years. Despite this boom, cross-border trade remains a largely untapped opportunity for small and medium-sized enterprises (SMEs). 'That is set to change with e-tailers bold enough to navigate the global landscape standing a chance to reap huge benefits in the years to come,' says Gregory Saffy, managing director for sub-Sahara Africa at FedEx. There are several important practices that businesses should keep in mind when wanting to expand outside of their home territory, says Saffy. These include: Localising for your target market – To boost global sales, SMEs must tailor their offering to local preferences. This includes researching your chosen market, translating product descriptions where needed, using local currencies, adjusting sizing or packaging, and aligning messaging with cultural norms. Localisation builds trust and relevance, increasing the likelihood of purchase. Understanding regional buying behaviours and adapting accordingly helps brands stand out in competitive foreign markets. Know your tax and customs obligations – Every country has unique import duties, including VAT rules and customs requirements, and it is important to research these thoroughly. Transparency around duties and delivery timelines will help to prevent customer dissatisfaction. Staying compliant not only avoids legal trouble but also enhances credibility and paves the way for further global growth. Offer multiple payment options – International buyers are more likely to complete a purchase when they have access to familiar and secure payment methods. Integrating globally renowned and reputable payment platforms that enable transactions in multiple currencies and across borders will improve conversion rates. 'Flexibility in payment options shows professionalism and meets the expectations of today's sophisticated online shopper,' says Saffy. Efficient and headache-free delivery is key to cross-border success – 'Outsourcing logistics also allows businesses to focus on growth while reducing the operational administration burden,' says Saffy. Partnering with experienced logistics providers, such as FedEx, helps SMEs manage international shipping and customs clearance seamlessly. For example, FedEx International Connect Plus (FICP) offers fast, cost-effective shipping designed for e-commerce packages weighing up to 20kg. The service offers day-definite international shipping, connecting e-tailers and consumers in just three to four business days. "Providing businesses with a broader portfolio of shipping solutions that match their specific needs is a top priority for us at FedEx', says Saffy. 'There will always be challenges when entering new markets, but with the right tools and support,' says Saffy. 'We believe that South African SMEs are well-positioned to seize the rewarding cross-border opportunities ahead.'
