Pakistan is at crossroads with respect to dealing with climate change-related risks to agriculture. On the one hand, policymakers continue to grapple with extreme weather events, such as floods and droughts and consequently establish risk management mechanisms. On the other hand, they must deal with profounder socioeconomic, political, and environmental concerns that can exacerbate poverty and food insecurity for vulnerable farm households (Ribot 2010). On a local level, farmers are at the forefront of responding to global environmental change (McCarl 2010). Thus, it is critical to understand their ability to take suitable actions for reducing risks and transforming agriculture to a more resilient system (Eakin 2015). In the environmental change literature, such capacity is called ‘adaptive capacity’ and it comprises of two major components: (1) the bundle of financial and managerial resources available to farmers, such as using sustainable agriculture practices e.g. no tillage and integrated soil fertility management; and (2) institutions, such as crop insurance and emergency management that can influence farmers’ ability to access resources (Brown and Westaway 2011; Eakin et al. 2016; Engle and Lemos 2010). Despite a series of important advances in the interdisciplinary field of climate risk management, many studies often simplistically assume that all adaptive capacities are equally important for helping farmers manage both climatic and non-climatic stressors (Lemos, Manuel-Navarrete, Willems, Caravantes and Varady 2016). Yet, little is known about the trade-offs that may exist between capacities that are static (focus on present) versus dynamic (focus on future). For example, while welfare programmes could help farm households develop specific capacity to deal with an extreme weather event, reliance on cash transfer alone can also create rigid dependencies between the government and farmers (Lemos, Lo, Nelson, Eakin and Bedran-Martins 2016). Thus, there is a need for a more comprehensive examination of the interactions between farmers’ specific capacities to manage climatic risk and the generic capacities to improve conditions of inequality, poverty, and food security. This paper develops a conceptual framework that can inform policy decisions for allocating scarce resources for development that is compatible with climate risk management.

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