Ecological and financial strategies provide complementary benefits for smallholder climate resilience: insights from a simulation model

© 2021, Resilience Alliance. All rights reserved.Researchers and development organizations regularly grapple with competing ecological and financial strategies for building climate resilience in smallholder agricultural systems, but rarely are such approaches considered in tandem. Using a social-ecological simulation model, we explored how different combinations of legume cover cropping, an ecological insurance, and index-based crop insurance, a financial insurance, affect the climate resilience of mixed crop-livestock smallholder farmers over time. The model simulates interactions between soil nutrient dynamics, crop yields, and household wealth, which is carried solely in the form of livestock. We assume legume cover cropping provides biological nitrogen fixation, thereby increasing soil fertility and productivity over time, whereas microinsurance gives payouts in drought years that provide ex-post coping benefits. Our model results indicate that the benefits of cover cropping to mean household income strongly complement the shock-absorbing benefits of microinsurance. Specifically, we found: (1) insurance always provides larger benefits during and in the wake of a drought, while cover cropping progressively reduces poverty in the medium-to long-term; (2) the use of crop insurance solely as an ex-post coping strategy may not reduce the incidence of poverty; and (3) legume cover cropping offers larger relative benefits in more degraded environments and for poor farmers. These results underscore the complementary roles that ecological and financial strategies could play in building resilience in smallholder agricultural systems. The stylized model constitutes an important social-ecological foundation for future empirical research to inform agricultural innovation and sustainable development priorities.