Contingency planning results in contingency plans that need to be specific and are based on the risk and impact analysis and the MPA gaps analysis. They include recurrent local weather risks of a lower magnitude that can be multi-dimensional. Contingency plans should communicate anticipated funding requirements and support the timely drafting of a Flash Appeal in the event of an extreme weather event − they need a regular update. Sector-level contingency/preparedness plans (e.g. agricultural sector) form a part of the national contingency plan.

Box 17: General Contingency Activities

• Situation and risk analysis (including gender and diversity analysis).
• Development of a response strategy (including regular update).
• Operational delivery resulting in a cluster summary plan.
• Coordination and management arrangements.
• Operational support arrangements.
• Identification of preparedness gaps and actions (preferably, this includes contingency plans for early action).
• Funding requirements.

The following is an example of drought contingency planning (can be applied to any other agricultural extreme weather event):

• Cyclic approach: Drought management takes drought as a cyclic event that starts with drought planning, including DRR (during normal phases), to drought response (in critical and emergency phases). Drought preparedness and mitigation feeds into contingency planning, while contingency plans inform effective drought responses and vice versa.

• Key activities: Risk assessment and its impacts, describing seasonal calendars that are a basis for drought contingency planning and should be embedded into drought contingency plans. Developing scenarios and defining timelines for the selected activities (to be integrated into the seasonal calendar that is included in the contingency plan). Decide what support is needed at each stage of the drought (see also Annex 5 Gender Roles in Emergency Livestock Activities).

• Institutional framework: For example, Kenya has a drought management authority responsible for overall drought risk management, collaborating and coordinating partners at the national platform for DRR.

Key components of a drought management system (Lesukat, 2012):

• A national drought management policy.
• A drought early warning system.
• A set of district-level contingency (‘shelf’) plans.
• A drought contingency (response) fund.
• Drought coordination and response structures.

Contingency plans that include insurance policies and payouts have to make sure that there is accountability and a monitoring and evaluation plan. These contribute to the development, or further enhancement, of a risk management information system, and also incentivize people to take early action (see Box 17, above).

Box 18: Insurance Example: ARC Contingency Plan Principles

ARC contingency plans ensure payouts and other benefits reach the extreme poor, as they cannot afford insurance premiums. As the plan covers a period of the first few months after the extreme drought, it has to be linked to the broader ERP concept and disaster recovery frameworks of the respective government.

Contingency planning is developed collaboratively between national governments, in-country partners and, where needed, the ARC Secretariat according to the following planning guidelines, e.g.:

• Time Sensitive and/or Catalytic: ARC payouts must be used for time-sensitive activities that would not be possible without ‘first available funds’ (ideally within 120 days).
• Livelihood enhancement: ARC payouts should not be used for general investment activities but for protecting livelihoods of beneficiaries who would be more negatively impacted if they needed to wait to receive assistance.
• Duration: Each activity should be completed within six months to ensure that financial resources are utilized in a timely and efficient manner.

EXAMPLE: Contingency plan − ARC Senegal (ARC, 2013)

ARC insurance is integrated into broader policies (e.g. the National Strategy for Economic and Social Development − SNDES and The Agricultural-Forestry-Livestock Framework Act − LOASP) and calculated along a five-year risk-return period and $30m maximum coverage. The parameter is based on simulations conducted using the early warning Africa RiskView allowing an ARC payout in advance of a drought. The contingency plan (‘Operations Plan’) takes into account existing national systems and deploys an ARC payout to support activities to reach needy households in a timely and cost-effective manner.

Activities

As drought would result in a deterioration of food and nutritional security for households and animals, the following support would be financed from ARC payouts: 1) food distribution and the distribution of food coupons (e.g. vulnerable 800,000 persons for 120 days), 2) supplementary feeding for children and mothers, and 3) implementing livestock relief operation.

Coordination (illustrated for activity 1 − food distribution/vouchers)

The Direction de la Protection Civile (DPC), as a part of the Ministry of Interior, would coordinate all ARC response activities at the central level. For each activity, one institution is defined to lead the implementation, using different sub-structures. The food assistance would be coordinated by the Food Security Steering Committee at the national level.

At the regional level, decentralized structures of the Ministry of Interior (local elected officials) would implement the activities. If needed, the government would use NGOs, the World Food Programme and/or the private sector as a channel to provide foodstuffs in areas where these partners have effective structures.

Targeting

Every year, a vulnerability assessment is conducted in cooperation with all major institutions involved in food security. This needs assessment would lay the basis for the identification of beneficiaries for activities financed with ARC payouts.

The flow of funds and M&E

The Ministry of Finance would allocate ARC funds to the respective institutions involved in the implementation of the activities within 48 hours. Each institution would be responsible for managing and accounting for the funds. The local institutions would send a monthly report on the disbursement status, coordinated by the DPC at the national level.

At the end of the operation, DPC would submit a final comprehensive operational and financial report to ARC (audited by the respective Senegalese ministries and the Auditor General’s office, according to the jointly developed ARC terms of reference).