For a farmer who loses crops to repeated flooding, recovery can mean starting again with little income and even less financial protection.
Deputy Prime Minister and Minister for Industries, Commerce and Business Development Manoa Kamikamica said that reality was why climate risk finance must form part of Fiji’s push to strengthen the rural economy.
Speaking at the Pre-COP session on Climate Risk Finance and Insurance for MSMEs at the Sofitel Resort and Spa in Nadi this week, he said micro, small and medium enterprises (MSMEs) remained a major part of Fiji’s economy, with previous estimates placing their contribution to GDP at around 18 per cent.
“Until we unlock the potential of the rural economy, Fiji will be a floundering economy, in my opinion,” Mr Kamikamica said.
He said farmers and small businesses in vulnerable areas often faced repeated losses from heavy rainfall and flooding, affecting both business operations and household income.
Parametric insurance, he said, offered a practical way to reduce that risk.
“It changes the whole game. It actually motivates farmers to farm because they know they’ve got a risk mitigation tool,” he said.
Unlike conventional insurance, parametric insurance provides predetermined payouts when agreed triggers are met, reducing the need for lengthy loss assessments and allowing support to reach affected businesses more quickly.
Mr Kamikamica said that affordable and accessible insurance could support wider rural economic development by giving farmers and entrepreneurs greater confidence to invest, recover and continue operating after climate shocks.
“For Fiji, it’s been a very useful tool,” he said, while encouraging consideration of higher compensation levels as the product develops.
The DPM thanked the UNDP Pacific office in Fiji, UNCDF, ADB and Tower Insurance for developing Fiji’s dedicated parametric insurance solution for MSMEs in Fiji.
