- Reorient the discussion from ‘development’ to ‘risk’
- Emphasise the importance of locally owned institutions such as community banks
- Adapt credit models and delivery channels
The World Food Programme has predicted that the coronavirus pandemic will double the number of people facing crisis levels of hunger. “We could be facing multiple famines of biblical proportions,” according to its executive director, if we don’t act to avert them.
Food crises are not extraordinary events, and each has prompted substantive policy analyses and calls for action. Yet despite widespread agreement on the unacceptability of hunger, international institutions have struggled to deal with the problem. Even before the coronavirus, 135 million people worldwide were experiencing acute food insecurity. Words have not translated into deeds.
Improved agricultural productivity and profitability in the low-income countries that are at greatest risk of food shortages will help allay the threat, at the same time as increasing long-term resilience by reducing poverty.
Policy discussions on financing agriculture are typically conducted in the language of ‘development finance’. This term is often used synonymously with concessional finance, which involves extending loans to farmers at interest rates below market rates. Concessional finance perpetuates dependence on government and donor assistance, and is unlikely to be sustainable as the demand for capital grows.
But development finance is essentially a matter of financing risks that need to be financed but are shunned by other lenders. Agriculture is often under-served by lenders. Sometimes this is because the risks are genuinely high relative to other lending opportunities, or because financial institutions have positioned themselves to service businesses in other sectors. Often it is because the risks are not understood.
To close the funding gap, there is a need to diversify sources of investment beyond governments and donors. What are required are financial institutions that understand agriculture, agricultural value chains and the risks inherent to the sector.
“To close the funding gap, there is a need to diversify sources of investment beyond governments and donors.”
Changing language from ‘development’ to ‘risk’ reorients discussion to a language of finance and helps structure discussions on sustainable finance. In agriculture as in any other sector, lenders have to be able to assess and manage risk. This means most lending will have to be on commercial rather than concessional terms.
Commercial finance does not have to be highly priced. It just has to reflect administration costs and a risk premium that will vary according to the risk profile of the borrower and the project. Banks investing in agriculture must be allowed to do the job we have assigned to them in our economic system. The Dutch multinational Rabobank is an example of a successful specialist agriculture lender which has made an organisational investment in understanding the sector. Rabobank, however, operates primarily in middle- and high-income countries.
Locally owned lenders are more likely than national or multinational banks to understand the risks involved in agricultural investment and the importance of the sector to the local community. In the United States these are known as ‘community banks’, which emerged to finance local farmers because the big national banks were not interested.
Community banks use a relationship banking model as opposed to a transactional model. They adjust collateral requirements accordingly, sometimes offering unsecured loans when transactional bankers would consider this practice too risky.
To encourage the establishment and growth of locally owned banks, regulatory relief should be considered, such as reducing the amount of capital that banks are required to hold and lowering the threshold level of financial sector experience required of shareholders and directors. Since community banks are not systemically important, they can be allowed greater room to operate than larger banks.
“Banks investing in agriculture must be allowed to do the job we have assigned to them in our economic system.”
Community banks do not have to remain small, however, and it is important to lay down clear regulatory pathways that enable good small lenders to grow to become good bigger lenders, while still retaining their commitment to a community. This can be done through graduated licenses, for example, whereby the larger a lender grows, the more demanding licence conditions on capital requirements and financial experience become.
More flexible credit models are also needed. Credit models that rely on real assets (land and buildings) are often unsuitable for financing agriculture, particularly for small-scale producers and where land is communally owned. Lending models that accept movable assets as collateral (inventory, receivables, contracts, or even transplantable trees and vines) are more suitable.
Credit delivery channels are changing with technological innovation. Equity crowd-source funding and peer-to-peer lending are internet-based platforms that connect investors with those who need to raise capital. These and other online banking models are less costly and more adaptable than traditional bricks-and-mortar banking. They can be customised to fund investment in small-scale agriculture in particular geographical areas, potentially attracting local investors.
If we are to live up to our commitments to avert food crises both during and after the COVID-19 pandemic, low-income-country farmers need new sources of funding. Unless a much larger share of finance is provided at commercial rates, it will continue to be insufficient for the improvements in productivity that are required. Commercial banks that are rooted in their communities and allowed the freedom to develop lending models that are tailored to local environments can play a vital role in providing the agriculture sector with sustainable finance.
In October last year in Amsterdam, the Netherlands Ministry of Foreign Affairs hosted a high-level international conference that discussed the mental health and psychosocial support needs of people affected by emergency situations and protracted crises.
The conference declaration, endorsed by 25 countries, stressed that “armed conflicts, natural disasters and other emergencies take an immense toll on people’s mental health and psychosocial wellbeing.” Best estimates, the declaration noted, suggest that “these experiences more than double the prevalence of depression, anxiety, and other mental health conditions that impair daily functioning.”
The world was failing to respond to this problem. Delegates at the conference expressed concern that:
“The vast majority of people in need of adequate mental health and psychosocial support affected by humanitarian crises do not have access to evidence-based, quality and human rights-based services … Mental health and psychosocial needs have thus far had low priority on humanitarian agendas at national and international levels.”
Now, six months later, we are all in a protracted crisis, whose impacts on mental health are only just beginning to be felt. Many of us are grieving lost friends and relatives, others live in fear of infection or unemployment, and all of us are having to adjust to lockdowns or other measures that have upended the lives we were used to. Before the spread of the coronavirus, almost 600 million people worldwide were estimated to be suffering from anxiety or depression. Suicide took the lives of 800,000 people a year, and was the second leading cause of death among those aged 15–29.
These figures are now likely to rise. During the severe acute respiratory syndrome (SARS) epidemic in 2003, the number of suicides in hard-hit areas among people aged 65 or older increased by 30%. Almost one third of health workers suffered emotional distress. Of people who recovered from SARS, half experienced anxiety in its wake, while post-traumatic stress disorder and depression were common among those who survived life-threatening bouts of the disease.
“A 2016 study showed that even a week-long lockdown can have deleterious effects on depression and mood among young people.”
SARS infected only 8,000 people and killed fewer than 800. At the time of writing on 27 April, COVID-19 has infected 3 million and taken the lives of 200,000 – and that’s only those we know about.
The toll on our mental health is likely to be severe. Countries such as Italy are now approaching their third month of lockdown, but a 2016 study showed that even a week-long lockdown can have deleterious effects on depression and mood among young people. A survey of 3,000 people with experience of or an interest in mental health problems in the UK in late March found widespread concern about COVID-19’s impacts.
Respondents were already experiencing increased anxiety and were worried about the impacts of isolation for themselves and their relatives (Britain had only just begun its lockdown). They also feared being unable to access mental health support services during the pandemic.
It is not only our minds that will suffer. Before the coronavirus, poor mental health was estimated to cost the world economy $2.5 trillion every year as a result of increased healthcare costs and lost productivity at work. This toll was projected to double by 2030, even in the absence of the pandemic.
Mental health problems may also make it harder for governments to stem the spread of the virus. As people grow more distressed and find it harder to stay indoors, for example, adherence to containment measures and compliance with public health advice could weaken.
Governments around the world dedicate an average of just 2% of their health budgets to mental health. This proportion ranges from an average of 20% in Europe to 0.1% in South-East Asia and sub-Saharan Africa. Such investment has clearly been insufficient even in a pre-coronavirus world, and increasing expenditure can have large positive impacts on individuals, economies, and societies.
“Governments around the world dedicate an average of just 2% of their health budgets to mental health […] Such investment has clearly been insufficient even in a pre-coronavirus world”
A 2016 study found that scaling up effective treatment for depression and anxiety would cost the world approximately $147 billion over 15 years (an annual sum less than 0.5% of the annual cost of mental health disorders to the world economy). Even if these measures improve the ability to work and productivity at work by just 5%, the benefit to cost ratio will be between 3.3 to 1 and 5.7 to 1.
It is likely that new treatments will be needed to help people cope with a novel crisis such as the coronavirus, but we don’t yet know what works. A position paper in The Lancet has highlighted the “urgent need for research to address how mental health consequences for vulnerable groups can be mitigated under pandemic conditions, and on the impact of repeated media consumption and health messaging around COVID-19.” The immediate research priorities, it argues, are to “monitor and report rates of anxiety, depression, self-harm, suicide, and other mental health issues both to understand mechanisms and crucially to inform interventions.”
While we wait for definitive evidence, a number of organisations have been producing guidance – for policy-makers, healthcare workers, employers, and ordinary people – on how to mitigate the virus’s mental health impacts. I’ve collated a few of them here.
For policy makers:
- The Mental Health and Psychosocial Support Network (MHPSS) has published a comprehensive COVID-19 Toolkit that includes resources to support policies on quarantine, risk communication, community engagement, stigma, human rights, frontline healthcare responders, and support and protection for children and other vulnerable groups.
- UNICEF has developed operational guidance on MHPSS policies for children, adolescents, caregivers, and communities. The guidance emphasises the importance of designing policies in consultation with children and adolescents who are at risk of, or who have suffered from, mental health problems. It urges health policy makers to work with and share information with other sectors and organisations delivering services in areas such as education, gender-based violence, and child protection.
- United for Global Mental Health has a weekly webinar that provides policy makers with the latest evidence on the mental health impacts of COVID-19.
- Guidance produced by the Inter-Agency Standing Committee Reference Group on Mental Health and Psychosocial Support in Emergency Settings recommends that mental health should be a “core component of the public health response” to COVID-19.
Delivering effective mental health care, it argues, will not only help stop transmission of the virus but strengthen societies’ long-term resilience against such crises. Countries should not adopt one-size-fits-all approaches, but should make efforts to understand local contexts including pre-existing mental health issues in communities and the needs of specific groups including women, children, people with disabilities, older adults, and minority ethnic groups.
Where MHPSS services are thin on the ground, moreover, policy makers should work through and support local care providers such as families and community leaders. The briefing concludes with 14 globally-recommended activities for dealing with the virus.
- Given that COVID-19 presents us with a global humanitarian crisis, this toolkit developed by the Mental Health Innovation Network for integrating mental health into general healthcare in humanitarian settings is also of relevance. It contains tools for planning, building the capacity of general health workers to deal with mental health, strengthening referral pathways and follow-up mechanisms, and building partnerships and enlisting support from other sectors.
For healthcare workers, employers and ordinary people:
- ICRC guidance for health workers lists warning signs and steps for providing basic psychological support to colleagues and employees, and for looking after oneself, including when in quarantine or isolation.
- Guidelines for employers produced by UNICEF, the ILO, and UN Women underline the role firms can play in reducing stress by providing accurate information on the virus, supporting workers by providing counselling and access to psychosocial services, and allowing flexibility in working hours so that those working at home can better cope with family demands.
- Alzheimer’s Disease International has gathered a range of resources for people with dementia and their carers. The organisation’s website has webinars, news, case studies and advice from a number of countries and in several languages.
- The UK government has produced advice for parents who are at home with children (the most thorough of several similar efforts available online). The advice is broken down by age group (routines are particularly important, including sleep routines, both for parents and their kids) and includes children with existing mental and physical health issues and those who are themselves carers.
- This WHO briefing has advice for the general population, health workers, health facility managers, the elderly and their carers, carers of children, and people in isolation. Regular exercise, limiting intake of news, keeping to sleep routines, and supporting others in person or remotely are recommended for all groups.
“Countries should not adopt one-size-fits-all approaches, but should make efforts to understand local contexts including pre-existing mental health issues in communities”
Most world regions would benefit from devoting more resources to mental health in normal times – sub-Saharan Africa’s allocation of 0.1% of its healthcare budget to mental health, for example, comes in a context where the number of years lost to disability because of mental disorders almost matches the number of years lost because of infectious diseases.
During a crisis such as the coronavirus, mental health care becomes yet more urgent. There is an urgent need to ratchet up research into effective mental health interventions. Respondents to the UK survey in March reported that contact with relatives and friends, physical activity, managing news consumption, keeping busy, maintaining routines, and relaxation techniques including meditation, mindfulness and prayer were helping their mental health during the pandemic. Researchers and innovators should build on these insights and continue to consult those with experience of mental health problems as they develop high- and low-technology solutions.
They should also tailor interventions to different settings. Mental ill health is still a taboo subject in many countries, leading governments and communities to ignore it or even to punish those suffering from mental disorders.
Family and religion play a stronger role in providing psychological support in some countries than in others, and in these settings interventions that work through rather than parallel to these institutions may prove more effective. Where internet coverage remains low, digital interventions – to provide information, assess and monitor risks, connect people to services, and provide direct therapy – may need to be complemented by telephone-based solutions. And where the availability of pharmaceutical therapies is limited, an emphasis on counselling and community-based solutions will be more appropriate.
Given the urgency of responding to the mental health impacts of the coronavirus pandemic, asking people in different environments what they think will help them is a shortcut to developing successful interventions. Long-term monitoring of these interventions’ impacts and cost-effectiveness can assist policy makers to identify and scale up those that work.
In my earlier post on tackling coronavirus in slums, I recommended that community leaders be enlisted and supported to lead the response.
Local chiefs or councillors, religious leaders, traditional healers and other respected figures, I argued, “are best placed to advise on the appropriate isolation units and on the measures and constraints that might be accepted by the inhabitants of each informal settlement. This is particularly important in slums where the state has limited legitimacy and capacity … [Leaders] can also develop measures of their own, which may be more appropriate to the local context than broad-based policies developed by central governments.”
Read the report: Justice for All and the Public Health Emergency
Last year, our Justice for All report noted that 1.5 billion people had a justice problem they could not resolve. Now, as we gear up to face a global pandemic, a new report exposes the danger to those already poorly served by justice systems, who may face some of the greatest risks.
Last year, our Justice for All report noted that 1.5 billion people had a justice problem they could not resolve. Now, as we gear up to face a global pandemic, those already poorly served by justice systems are facing some of the greatest risks.
Justice systems are vital to responding to the COVID-19 pandemic and mitigating its worst effects, but they will need to overcome many challenges if they are to operate effectively. This briefing, Justice for All and the Public Health Emergency, discusses the most pressing priorities for justice leaders and proposes areas for urgent action in the face of a rising number of infections.
Read the report: Justice for All and the Public Health Emergency