severity of its food security situation, the assessment will have to be undertaken in a probabilistic manner as food production, food prices, and livelihood coping strategies of people when faced with inadequate access of food are themselves uncertain. For instance, food production in countries that practice rainfed agriculture is heavily dependent on the rainfall in the growing season but there is a large annual variability in the rainfall that cannot be predicted beforehand. Market prices likewise are uncertain and predicting the local market prices of agricultural commodities even in the simple context of a regional or national production shortfall has proven to be a difficult task (WFP 2011). Further, the globalization of trade in soft commodities makes the determination of links between global and local prices a highly complex issue (Prakash 2011) that involves market risk, currency risk and government sanctions in addition to climate shocks.

In the following sections, models of crop production losses using a catastrophe risk framework will be presented to show how these models can inform a food security vulnerability model in order to evaluate the food security profile of a nation.

# <u>Developing Country Food Security Issues That Are Relevant for Modeling</u>

Agriculture production in developing countries is characterized by its small size farm structure with often more than 70% of the farms being less than 2 hectares in size compared to 15% for developed countries (Adamopoulos and Restuccia 2011). Small scale farmers in developing countries operate at subsistence levels due to the lack of agriculture infrastructure, efficient supply chains, finance and trading platforms. Developing countries often have a high share of rural population, a high share of agriculture in employment and a high share of agriculture in the country’s gross domestic product (Mahul & Stutley 2010). Developing countries generally show higher poverty rates in rural areas than in urban areas (World Bank 2014). In some developing countries the rural poverty rate is multiples of the urban poverty rate, for instance in Cameroon the rural poverty rate is 4.5 times the urban poverty rate, 3.3 times in Malawi and 1.8 times in Nepal (World Bank 2014). In SSA and SA countries with their rural share of the total population higher than the urban share and higher rural poverty rates than urban poverty rates, poverty is concentrated more in rural areas than in urban. The rural poor have limited coping strategies as they are already at the limit of their livelihood and in the absence of government support in a disaster farmers are forced to give up farming, sell all livestock and move to urban centers to seek work, which in return can lead to illegal settlements and the development of shantytowns.

Another aspect of agricultural production in SSA and SA countries is the very high dependence on rainfed agriculture, the lack of irrigation systems and overgrazed rangeland from livestock, which means that crop production or livestock mortality is highly influenced by rainfall variability, be it in lack of rainfall (drought) or excess rainfall/flood. The frequency and severity of rainfall distribution is therefore closely tied to the food security of poor rural households whose livelihood income is derived largely from farming activities. At the same time, food security is not just about food production alone, more so for poor people who are net buyers of food, irrespective of where they live in rural or urban areas, as in the case of net food buyers food security is more about food access as has been argued by Crush et al. 2012.

Food security is intrinsically a household issue and is about how households cope financially with reduced access to staple food and increasing prices for food in general. In developing countries, two 4