4.2 Return on investment of anticipatory action interventions
Anticipatory action is defined as acting ahead of predicted hazards to prevent or reduce acute humanitarian impacts before they fully unfold. The window of opportunity for anticipatory action is between an early warning trigger (the point in time when forecasts show that a hazard is likely to occur in the future) and the actual impact of the hazard is felt on lives and in livelihoods. A trigger system is developed and dedicated funds are pre-allocated to be quickly released when pre-agreed thresholds are reached. The trigger system is developed based on relevant forecasts (for instance, rainfall, temperature, soil moisture, vegetation condition, and others in the case of climate-related hazards), along with seasonal observations and vulnerability information.
Anticipatory action is a proven cost-effective measure for mitigating the impact of disasters with significant resilience dividends. By delivering support before a crisis has occurred, efficient and timely anticipatory action can curb food insecurity, reduce humanitarian needs and ease pressure on strained humanitarian resources. Triggered by context-specific early warning systems, anticipatory actions are short-term interventions that aim at protecting development gains from the immediate impact of forecast shocks.229
Supporting agricultural livelihoods ahead of shocks is a direct investment in the food security of farmers, pastoralists, fishers and by extension the resilience of the agricultural sector. It has been demonstrated that when hazards strike, anticipatory action interventions help communities to maintain dietary diversity and high-calorie intake, and to avoid resorting to negative coping mechanisms. The ripple effects of anticipatory action can also allow households to build and diversify economic opportunities and financial capacity.
This section provides concrete quantification of avoided damage and losses and added benefits through anticipatory action interventions. Since 2016 and in coordination with governments and partners, FAO has implemented more than 50 anticipatory action interventions within a range of contexts across various regions including Latin America and the Caribbean, Africa, the Near East and Asia. These interventions were aimed at anticipating and mitigating the impact of forecast drought, cold wave (known as dzud), the COVID-19 pandemic, plant pests and animal disease, among other hazards and shocks. Results presented in this section correspond to ten such interventions.
One measure used of the direct economic benefits of anticipatory action is the return on investment. The main output of the return on investment is the BCR, which provides a summary of the value for money spent for acting before the occurrence of a forecast hazard to prevent or mitigate its impact on the livelihoods of affected communities. For the ten interventions analysed, data was collected through structured interviews with beneficiary and control households. The counterfactuals between the two samples are used to form the basis of outcomes from anticipatory action interventions that then follow calculations of added benefits and avoided losses from the intervention.
Results of the BCR for anticipatory action for the ten interventions analysed have been mostly positive, up to 7.1 as shown in TABLE 6. In the cases of Ethiopia and Mongolia, where the BCR is highest, investing USD 1 in anticipatory action led to over USD 7 in avoided losses and added benefits for beneficiaries. A range of benefits were calculated, including those related to livestock health and mortality, crop production, as well as animal products such as dairy production. While the BCRs provide an understanding of the cost effectiveness of anticipatory action interventions, it is important to unpack the impacts of these benefits on households.
TABLE 6 BENEFIT–COST RATIOS FOR FAO’S ANTICIPATORY ACTION INTERVENTIONS
Source: Authors’ calculations.
The BCRs in Bangladesh and Viet Nam were considerably lower than other anticipatory action activations. These were the only FAO impact analyses focusing on anticipatory action for rapid-onset hazards, which normally cause immediate impacts that are more difficult to prevent compared to slow-onset hazards. The differences in BCRs stem from higher operational costs associated with distributing goods to hard-to-reach communities in remote areas within a short period of time, or the types of calculated benefits. For example, the distribution of waterproof drums ahead of rapid onset hazards potentially delivers years of future benefits that are not included in the calculation. Hence, differences in the return on investment should not be viewed as being the result of stronger or weaker preparedness.
Anticipatory actions to protect livestock ahead of forecast hazards have proven particularly effective in reducing animal mortality, maintaining animal body condition and productivity, as well as the reproductive capacity of herds. In the case of Colombia, Kenya, Mongolia and Sudan, feed distribution and animal health campaigns before a drought or cold wave had major effects on livestock health and productivity, with cascading positive effects on nutrition.
In Mongolia, early distribution of feed ahead of the winter dzud led to avoided losses reducing animal mortality by the equivalent value of four cattle per household; and at the same time increasing milk production, which is key for children’s nutrition.230 In Colombia, the quantitative value of reduced animal mortality was equivalent to the value of 11 sheep or goats per household.231
Acting ahead of drought in Sudan had a significant effect on reducing livestock mortality rates, which for goats was reduced by 11 percent.232 In Kenya, anticipatory actions focused on protecting the livestock assets of semi-nomadic pastoralist communities delivered major benefits for animal health as well as milk production. Cows produced almost one additional litre of milk per day, 80 percent of which was used for household consumption, mainly for children under 5 years of age.233 In Afghanistan, feed distributions and animal health campaigns ahead of La Niña-induced drought in 2021 improved animal health, as well as increasing milk production. The percentage of livestock with deteriorated body condition was lower for cows, sheep and goats as well as reducing newborn mortality rates. Milk production also increased by almost 10 litres of cow milk and 3.3 litres of sheep milk per household. Improved animal health, reported by several beneficiaries, allowed them to sell their livestock at higher prices.
Positive results were also recorded for anticipatory action interventions centred on crops. Depending on the context, these may include stress-tolerant seeds, early harvesting, plant protection from hazard-induced pests and diseases, short-cycle crop seeds, and small irrigation equipment, among other interventions.
Historically El Niño has had devastating effects on agricultural production in the Philippines. For example, during the 2015/16 El Niño, Filipino farmers lost 1.5 million tons of crops and more than 400 000 people needed assistance. Learning from this lesson, anticipatory actions were triggered in 2019 ahead of El Niño-induced drought in Mindanao. As a result, families saw fewer crops fail and were able to cultivate larger plots of land and grow a wider variety of vegetables.aq Farmers were able to maintain an acceptable diet, were also able to sell vegetables in the local markets to support themselves through the drought and were less likely to revert to negative coping strategies.
In Colombia, acting ahead of the drought allowed beneficiaries to expand cultivation and increase agricultural yields. Actions included establishing community fields for rapid crop production, distributing seeds and tools, providing support for animal health and rehabilitating the water infrastructure. Without these anticipatory actions, food insecurity and economic hardships would likely have increased as migration from the neighbouring Bolivarian Republic of Venezuela continued placing further pressures on households and increased resource scarcity.231
Acting ahead of drought in Madagascar, anticipatory actions such as the distribution of vegetable seeds and micro-irrigation equipment were implemented. The interventions had significant effects on increasing vegetable production as well as decreasing crop loss. Production was up to six times higher for some vegetables.234
Additional benefits of anticipatory action interventions included some households avoiding vicious debt cycles. In the Philippines, for instance, the distribution of drought-tolerant seeds prevented beneficiaries from buying seeds on credit with high interest rates of up to 15 percent. Savings generated from seeds helped farmers keep their children in school and avoid potential negative consequences.
Positive impacts of anticipatory action are also reported in terms of enhanced food security across a wide range of projects and geographies. They help families and communities to maintain dietary diversity and high-caloric intake when hazards strike and to avoid negative coping mechanisms like skipping meals. While positive results have been recorded, they are not uniform across interventions.
In Madagascar, support to vegetable production through anticipatory action helped boost local food production and protected farmers from droughts.234 About 16 percent of beneficiaries reported poor food consumption, compared to over 40 percent of households that did not receive support from the anticipatory action intervention.234 In Bangladesh, 10 percent more beneficiaries of anticipatory action ahead of floods recorded acceptable food consumption than did control groups, but no major difference was recorded in adopting negative coping strategies.
In Afghanistan, anticipatory action interventions undertaken in 2021 included cash, livestock and agricultural support, and training. Beneficiary families displayed significant increases in their food consumption: families with acceptable levels of food consumption increased from a baseline of 6 percent to over 50 percent following the intervention.
Similar findings were reported in Sudan in 2017–2018 after a drought, as a consequence of an anticipatory action intervention.235 Feed distributions and animal health campaigns had a major effect on household milk production. On average, each household consumed an additional 0.8 litres of milk per day, which represents an additional 528 kcal per day. Just half a litre a day gives a five-year-old child 25 percent of the calories and 65 percent of the protein they need for healthy growth and development. Overall, beneficiary households were 12 percent less likely to have reduced meal size or number of meals per day. Similarly, in Mongolia, milk cows owned by beneficiaries produced six times more milk per day than non-beneficiaries during the dzud.230
In Viet Nam, waterproof drums were distributed ahead of Typhoon Noru in September 2022. These were used to save valuable goods for the household. Specifically, 57 percent of beneficiaries noted that waterproof drums were used to save food items with an average market value of about USD 9 per household.
EFFECTS ON RESILIENCE
While quantitative measurements of resilience are limited for anticipatory action interventions, qualitative evidence points to increased levels of household resilience following anticipatory action interventions. Refraining from distress sales of animals due to lack of feed or economic instability, not having to take out loans, holding onto seeds for future harvests and boosting income that can be used to purchase assets or increase productivity are some examples of how anticipatory action helps increase resilience.
In the Philippines, anticipatory action interventions ahead of the drought in 2019 helped families to avoid selling off valuable assets or keeping children home from school.ar In the 2016–2017 drought in the Horn of Africa, beneficiaries of anticipatory action interventions spent extra funds – including from increased milk production – on education, healthcare, and food and animal feed, and some households reported that they were able to save part of their earnings.
Anticipatory action interventions can also reduce existing risk, protecting livelihoods well past the effects of the initial hazard. For example, waterproof drums distributed ahead of floods in Bangladesh or ahead of typhoons in Viet Nam, can be used for more than ten years, including during future flooding. In Colombia, beneficiaries noted how drip irrigation systems and techniques allow them to produce multiple harvests per year, greatly expanding their level of food production.
Training given during anticipatory action interventions offered an opportunity to raise awareness and build skills for disaster risk reduction. In Colombia, water management training delivered as part of anticipatory action, helped to build community-level adaptive capacity to droughts. More research is needed to assess how communities have developed and utilized new skills and assets.
Ideally, revisiting areas that have received anticipatory action interventions in the future to assess how communities have developed and used their new skills and assets would provide further insight into how these programmes may have benefitted community resilience. This should be a focus for future learning and analysis to further understand the long-lasting effects of anticipatory action implementation.
TOWARDS THE INSTITUTIONALIZATION OF AN ANTICIPATORY ACTION SYSTEM
Effective early warning systems can lead to timely interventions, and further incorporating anticipatory action within disaster risk reduction policies, plans and financial frameworks, as well as within humanitarian and development frameworks, will allow countries to strengthen resilience and reduce disaster risks.236,237 Integrating anticipatory action interventions into legislation for disaster risk management and across sectors is another step to bolster institutional capacity.
Adding evidence of the benefits of anticipatory action programming, such as the cost effectiveness of anticipatory action, and the loss that can be avoided if the intervention is implemented on the ground in a timely manner may also be key in increasing government buy-in, and also show how these benefits can have long-term impacts on individuals and communities. It is important that international organizations and key stakeholders work with governments to build these internal institutions and policies to provide a platform for greater institutionalization of anticipatory action to be run and led by local bodies.
The effectiveness of anticipatory action means that this approach should be scaled up, especially as the frequency and intensity of hazards increases due to climate change.238 To date, anticipatory action has been implemented predominantly for natural hazards.239,240 However, acute food insecurity is often the result of compounding shocks such as conflicts, economic shocks, natural hazards and food chain crises, among others. Anticipatory action provides excellent scope to proactively manage residual risks, and in some cases reduce existing risk.
To sustainably expand the scale and scope of the anticipatory approach to crises, anticipatory action cannot be solely conceived as a proactive response measure pertaining to humanitarian actors. Instead, it is an opportunity to enhance coordination with other actors across humanitarian, development, peace, climate, and related programmes and financing frameworks.241 A layered financing approach combining different instruments under the same objectives represents an unprecedented opportunity to protect large numbers of vulnerable people against shocks. Partnerships with the private sector could have the potential to boost capacities for timely and effective action ahead of shocks.242
A particularly promising area of development in the anticipatory action space, with notable potential to bridge the humanitarian and development divide, is the growing interest in linkages between social protection, particularly adaptive or shock-responsive social protection systems, and anticipatory action approaches. Large scale examples from Kenya, Somalia, Ethiopia and recently Malawi are contributing to a growing evidence base on the potential role of social protection systems to channel anticipatory action assistance to large sections of a given population in anticipation of a forecasted shock. Indeed, progress in this area is being promoted as a potential “game-changer” of how the sector addresses the risks faced by climate vulnerable populations.
Above all, the sustainability of anticipatory action requires creating ownership and capacity at the country level. This entails supporting governments to integrate anticipatory action within national disaster risk management policies, processes and financial instruments, as well as empowering local partners, communities and all first responders to implement anticipatory action by having in place the necessary resources and mechanisms. Policies, legal frameworks and protocols on accessing funds for anticipatory action are missing in several countries. Generating evidence of anticipatory action’s impacts and benefits is crucial for improving the quality of programming, and for advocating for the institutionalization of the approach. To this end, any evidence generated must be accurate, transparent, and based on sound methodologies. Overall, a better understanding of the political disincentives and barriers to government engagement in anticipatory action is crucial.
There is greater scope for collaboration and recognition of mutually reinforcing overlaps between development, humanitarian, climate and peace actors and activities. For anticipatory action to scale up, it should be systematically integrated into building disaster and climate risk management for resilience to crises for people and countries.
