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Irrigation is Insurance
Weather variability is already affecting agriculture. Crop insurance is one way to think of managing this variability but it is rapidly becoming untenable as it is too expensive unless government subsidized national schemes. "The real insurance is irrigation," said Johnathon Lassers of Ariel Investment Management at the Global Ag Investing Conference in Singapore. Active in Uruguay, he notes growing variability in the rainfall patterns is impacting their farm.
"Water is one of the main risks in agriculture," added Tim Hornibrook of Macquarie Agricultural Funds Management. One of the best ways to hedge this is by being geographically diverse - across the span of a country and across the globe he suggests.