Fig. 5: Potential of risk pooling for risk management.

Cooperation levels are indicated by the number of risk pools, where nine risk pools stand for independent regions, and a single risk pool represents full cooperation. For (a–d), averages are taken over risk pools with population as weight. a Actual reliability for food production. Due to the highly populated regions H and I in Nigeria who feature an actual reliability for food production of 0%, the reliability for food production is low at the cross-regional scale in the absence of risk pooling. Risk pooling has the ability to completely resolve the reliability problem for food production, even under the high-pressure scenario. b Average food shortage per capita under deficit conditions. The average food shortage can virtually be eliminated through risk pooling, even under the high-pressure development scenario. c Solvency probability of the contingency fund. Cooperation in small risk pools initially aggravates the solvency probability due to the earlier occurrence of catastrophic yields over multiple independent regions and the resulting lack of time to capitalize the contingency fund. In larger risk pools, the earlier occurrence of catastrophic yields is compensated by the saving capacity of multiple regions, resulting in moderate improvements. d Average debt per capita over risk pools after payouts under conditions of insolvency (i.e., debt level of contingency fund after payouts translated in debt per capita to facilitate comparison). Risk pooling can reduce the debt levels substantially, which improves the practical implementability of external aid mechanisms in large risk pools. e Average yearly total cultivated area (average over all years). The cultivated area is reasonably stable over the different cooperation levels. Although risk pooling has important benefits in terms of food security and debt reduction, this is not at the expense of farmland expansion and the corresponding environmental cost, under scenarios with a constant population. f Total cultivation cost (summed over all years). The total cultivation cost is reasonably stable over different cooperation levels. The improvements in food security and debt reduction are not at the expense of growing cultivation costs at the cross-regional scale.