How do they cope?
Almost every year, the Khulna district of Bangladesh is hit by cyclonic storms. We asked small holder farmers earning less than three dollars a day how they coped with these repeated climate events.
What we found was that by the time the next disaster hit them, farmers were still trying to recover the loss of land, house and livestock from the previous event.
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Decodis did an illustration of a Khulna farmer's financial journey towards asset recovery from 2020-2023. This data is based on the answers from 240 farmers.
How to read this chart?
​INCOME: We broke income down between the percentage they use to pay off debt, and the percentage they use for their needs.​
ASSET DEPLETION: Then we added depletion as a bar in the opposite direction, representing how much the household still had to recover in lost assets (house, land, livestock, shelter, equipment etc) each month.​
ASSUMPTIONS: We were conservative in our assumptions. We assumed income was still flowing and we did not consider growing interest rates on delayed loans.​
REMITTANCES: Remittances are part of income. In our interviews, we found that remittances were not necessarily coming in larger sums during the catastrophic event, therefore we distributed it across the whole year.
May 2020: Amphan
Amid COVID-19 lockdown, Khulna was severely hit by category five cyclone Amphan. The damage was extensive. Houses and animal shelters were destroyed, crops were plagued by saline waters and livestock died by drowning or subsequent diseases.
On average, households lost USD 420 in assets due to Amphan.
They financed their recovery with savings, loans and by selling assets. Even though they scrambled whatever resources they had, like borrowing from different family members and MFIs and selling livestock, it was not enough to return to their previous state.
Based on 240 farmers' responses to our survey, we estimated the amount spent on asset recovery at around USD 14/mo.
A year after Amphan, households have two thirds of their lost assets. But keeping up with this recovery became increasingly hard as rising inflation eroded income.
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At this point, recovery efforts made up 19% of the household’s income.
May 2021: Yaas
Khulna was hit by another climate disaster on May 2021, just a year after Amphan. In spite of being a category one cyclone, Yaas caused extensive damages because of the floodings and salinization of the soil. This set farmer households back by a further USD 250.
After Yass hits, there is more asset depletion: more money-making goods need to be sold, more land needs to be recovered.
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Remittances are not flowing in significantly more to help them cope as relatives outside are also battling inflation and unemployment. Thousands of people had moved to major cities to look for paid work after Amphan and jobs opportunities are scarce.
Dec 2021: Jawad
Months after cyclone Yaas caused floods that damaged crops and spread disease among livestock, category one cyclone Jawad approached Bangladesh, lost strength and made landfall as a deep depression. Although not as severe as Yaas, the unexpected November floods set Khulna farmers back by at least another USD 200.
It had only been 5 months since Khulna was heavily flooded by Yaas, for which farmers had already had to patch together different sources of credit, so the ability to recur to relatives and friends was increasingly limited. And so were their savings and any formal credit line they could have access to.
May 2023: Midhili
When recovery seemed closer, cyclone season hit Khulna once again. The severe tropical storm Midhili caused widespread damage to homes, crops and infrastructure. Farmer households were set back by another USD 200.
Farmer households were close to recovering their lost assets due to the series of climate events, but Midhili brought further losses.
With reduced remittance and rising inflation, recovery efforts now made up a quarter of household income. This means there was less money available for food, health and education.
[Closing]
Conclusion. Call to action: attend our webinar, read the findings.​
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Photo by Rafiqul Montu: downtoearth.org.in
Disclaimer: This work was conceived and funded by CGAP as input to CGAP research on climate change and financial inclusion. The slide decks with findings published by Decodis and MSC on Findev Gateways have not been peer-reviewed or edited by CGAP. Any conclusions or viewpoints expressed are those of the authors and may or may not reflect the views of CGAP.