Kenya is among countries that were used to showcase the success of the weather based index insurance as a cheaper and long term solution to food security climate change according to a new report.
Launched at the beginning of this year, the report by the Consultative Group for International Agricultural Research (CGIAR) Research Program on Climate Change, Agriculture and Food Security (CCAFS) and the International Research Institute for Climate and Society (IRI) at the US-based Columbia University showcased success stories of the weather based insurance in Kenya, Africa and other developing countries.
Researchers examined current operational insurance programmes that have been expanded to cover and transform the livelihoods of thousands or millions of farmers. Helen Greatrex, lead author and a postdoctoral researcher at IRI, explains that index insurance can help populations whose livelihoods depend on the weather, such as smallholder farmers and pastoralists — to manage changing climate risks while addressing food insufficiency.
The report features WFP and Oxfam America’s R4 Rural Resilience Initiative (R4) as one of the five most significant efforts to expand insurance coverage to people who need it the most. “Many countries are leading a movement to increase insurance coverage for the most vulnerable farmers,” said IRI’s Dr. Dan Osgood, who co-authored the study.
“This shift could change the lives of millions of smallholder farmers across the globe, who face increasingly erratic weather due to a changing climate. R4 helps vulnerable rural households to increase their food security through community risk reduction, microinsurance, livelihoods diversification, credit and savings. The most innovative aspect of R4 is the ability of poor famers to pay for their insurance with their labor on activities that reduce the impact of drought and floods, and increase their productivity.
With the protection of insurance, when a drought hits, farmers receive automatic insurance pay-outs. This prevents them from selling off productive assets like livestock to survive or taking their children out of school. In 2012, more than 12,000 drought-affected households received an insurance pay-out of over US$ 320,000. This is the first time that a weather index insurance programme in Ethiopia has directly delivered pay-outs at such a large scale to small farmers.
Weather insurance has also been identified as a powerful tool to help people to better manage climate risk.
Since 2006, WFP has worked with its partners to test and scale up innovative ways of providing insurance protection to help people become more resilient and food secure. R4 is one of the most successful initiatives emerging from this work.
In Ethiopia R4 expanded from 200 farmers in one pilot village in 2009 to more than 25,000 across 89 villages in 2014. In 2012, R4 expanded to Senegal and implementation started this year in Malawi and Zambia.
The first assessment of R4 in Ethiopia shows insured farmers save 123 per cent more than the uninsured, buy 25 per cent more oxen and invest in seeds, fertilizer and productive assets. In one cluster, farmers increased their reserves of grain over 250per cent more than uninsured farmers.
Given the results and the growing evidence WFP and its partners are working to scale up R4. By 2017, the project hopes to have reached 100,000 farmers with insurance and other risk management tools.
To access the full report, visit:http://ccafs.cgiar.org/weather-index-based-insurance