Since 2008, the International Livestock Research Institute (ILRI) in collaboration with partners has undertaken extensive research in designing, developing and implementing market-mediated Index- Based Livestock Insurance (IBLI) products to protect pastoralists from drought-related footage scarcity, stated ILRI research brief.
The IBLI project was first piloted in Marsabit in 2010, and has since been scaled up in the most Arid and Semi-Arid Lands (ASAL) in northern Kenya and the Borena area in southern Ethiopia. IBLI contracts target extensive livestock system in dry lands where land use and access is largely based on complex informal rules and livestock herders migrate across large areas in search of feed and water for their animals.
Therefore, the identification of the geographic areas that constitute an insurable unit represents a key step in IBLI contract design, requiring the active participation of local communities for appropriate demarcation.
To come up with good result in this regard and mitigate climate risk, index-based insurance for livestock in the IGAD region policy roundtable and technical workshop was held here at IRLI campus, Addis Ababa from 24 – 26 June, 2019. The region countries are Djibouti, Eritrea, Ethiopia, Kenya, Somalia, south Sudan and Uganda.
More than 50 delegates from the member countries attended the workshop. The regional policy conference on scaling index-based insurance for livestock is organized by the IGAD and International Livestock Research Institute (ILRI), in partnership with the World Bank, the Technical Center for Agricultural and rural cooperation (CTA) and the Food and Agriculture Organization of the United Nations – Sub-regional office for Eastern Africa (FAOSEF).
The objective of the workshop is facilitating regional-level policy dialogue and support capacity development; enhancing the awareness of public and private sector actors on drought index-insurance for livestock and exploring good practices in the implementation of drought risk management strategies.
Among the attendees is Gebregziabher Gebreyohannes (PhD), state Minister for Ministry of Agriculture.
He said that index-based insurance is essential for Ethiopia especially for the pastoralist areas. “We have started testing application in Borena zone and selected areas of Somali region for the past one and half year. The major purpose of the program is providing indemnity payment for the pastoralists based on satellite image that indicates the drought –related forage scarcity with regard to the amount of animals. As our country is vulnerable to recurrent drought, the pastoralist area in particular is affected by repeated drought and loses numerous animals.”
Therefore, as of the state minister, apart from usual insurance in which compensation paid for loss or damage of property, this type of insurance is paid in advance. And it enables the pastoralists to mitigate the risk induced through drought by purchasing forage and preparing water for the animals in advance.
This insurance program is mostly operational in northern Kenya which borders Borena zone of Ethiopia for the past nine years and in Ethiopia since two years ago. Some local insurance companies are undertaking testing implementation in Borena and some areas of Somali region in collaboration with ILRI and world food program (WFP), said the state Minister.
Mahbub Maalim, Executive Secretary of IGAD, for his part, said, “Climate change is here with us and we will see more of its effects. We must step up the dialogue on adaptability in the horn of Africa.”
He further said that livestock keeping is a mainstay of the economies in the region, contributing 50 percent of the IGAD countries’ agricultural gross domestic product (GDP). For livestock, drought represents the single greatest cause of livestock mortality in the greater horn of Africa which is predominantly arid and semi-arid.
For his part, Jimmy Smith, Director General of ILRI, said, “Many livestock-supported livelihoods in the region are at risk due to increased climatic shocks and we must work together to help build resilience through market- based solutions even in the face of adversity.”
As to him, index-based livestock insurance is a proven mechanism to help farmers build that resilience. Establishing ways to amplify such mechanisms throughout the IGAD region has been the focus of the conference.
Unlike traditional insurance policies, which pay out against to losses, index-based livestock insurance relies on satellite-based indicators. It is designed to trigger timely indemnity pay-outs to insured pastoralists and agro-pastoralists before droughts become very severe – enabling them purchase fodder, food, feed supplements, water and vaccines to keep their herds alive until grazing conditions get better.
According to Michael Hailu, Director of CTA, it is preferable to build resilience among livestock keepers than to provide humanitarian assistance when droughts occur. “By building resilience now we can avoid suffering and the logistical complexity of aid provision later.”
He further said that the conference showcased the workings of the index-based livestock insurance and laid the groundwork for further deliberations and action on how program could be scaled up to benefit the region’s livestock keepers.
FAO sub-regional coordinator for Eastern Africa and representative to the AU and UNECA, Dr. David Phiri has made opening remarks on the workshop. Expressing his gratitude to ILRI and WB, for jointly convening the Ministerial Policy Dialogue on index-based livestock insurance, and the Ministry for giving adequate attention to this issue, he said that reiterate that the livestock sector contributes between 3 percent (Djibouti) and 54 percent (Somalia) to the GDP of IGAD countries, but that livestock owners and especially pastoralists are greatly influenced by climate change, with extreme weather conditions posing a potentially fatal threat to livestock and negatively impacting their productivity and food security for years.
Without doubt, as to him, drought is among the most serious problems in this region, and it is estimated that the annual costs of drought related production losses and related mitigation costs are estimated at almost 2 percent of the GDP of countries in the IGAD region. These costs have particularly pernicious impacts on small livestock producers, the poor and vulnerable.
Impacts of drought on livestock threaten to cause setbacks to the overall economy if adequate protection and response measures are not taken. It is essential that IGAD countries develop a common approach as this is beneficial in many ways including economies of scale, benefit spill-over from the countries that have developed adequate systems and materials that can be scaled up and rolled out.
Extending his remarks, he said, “In order to avoid these negative impacts on the region’s economies, we require not only early action in case of imminent droughts, but also preventive measures.”
Index based-livestock insurance is an important financial instrument that could be useful to mitigate the risk livestock owners’ face. FAO has assisted governments with testing this concept in Kenya and Ethiopia, and evidence has been obtained that it has positive impact to the welfare of the pastoral household, he stated.
In conclusion, he said that countries are advised to integrate this tool into their strategies, and for those who have successfully piloted it, to roll out implementation so that significant percentages of the population can profit from it.
organized by the IGAD and International Livestock Research Institute (ILRI), in partnership with the World Bank, the Technical Center for Agricultural and rural cooperation (CTA) and the Food and Agriculture Organization of the United Nations – Sub-regional office for Eastern Africa (FAOSEF).
The objective of the workshop is facilitating regional-level policy dialogue and support capacity development; enhancing the awareness of public and private sector actors on drought index-insurance for livestock and exploring good practices in the implementation of drought risk management strategies.
Among the attendees is Gebregziabher Gebreyohannes (PhD), state Minister for Ministry of Agriculture. He said that index-based insurance is essential for Ethiopia especially for the pastoralist areas.
“We have started testing application in Borena zone and selected areas of Somali region for the past one and half year. The major purpose of the program is providing indemnity payment for the pastoralists based on satellite image that indicates the drought –related forage scarcity with regard to the amount of animals. As our country is vulnerable to recurrent drought, the pastoralist area in particular is affected by repeated drought and loses numerous animals.”
Therefore, as of the state minister, apart from usual insurance in which compensation paid for loss or damage of property, this type of insurance is paid in advance.
And it enables the pastoralists to mitigate the risk induced through drought by purchasing forage and preparing water for the animals in advance.
This insurance program is mostly operational in northern Kenya which borders Borena zone of Ethiopia for the past nine years and in Ethiopia since two years ago. Some local insurance companies are undertaking testing implementation in Borena and some areas of Somali region in collaboration with ILRI and world food program (WFP), said the state Minister.
Mahbub Maalim, Executive Secretary of IGAD, for his part, said, “Climate change is here with us and we will see more of its effects. We must step up the dialogue on adaptability in the horn of Africa.”
He further said that livestock keeping is a mainstay of the economies in the region, contributing 50 percent of the IGAD countries’ agricultural gross domestic product (GDP). For livestock, drought represents the single greatest cause of livestock mortality in the greater horn of Africa which is predominantly arid and semi-arid.
For his part, Jimmy Smith, Director General of ILRI, said, “Many livestock-supported livelihoods in the region are at risk due to increased climatic shocks and we must work together to help build resilience through market- based solutions even in the face of adversity.”
As to him, index-based livestock insurance is a proven mechanism to help farmers build that resilience.
Establishing ways to amplify such mechanisms throughout the IGAD region has been the focus of the conference. Unlike traditional insurance policies, which pay out against to losses, index-based livestock insurance relies on satellite-based indicators. It is designed to trigger timely indemnity pay-outs to insured pastoralists and agro-pastoralists before droughts become very severe – enabling them purchase fodder, food, feed supplements, water and vaccines to keep their herds alive until grazing conditions get better.
According to Michael Hailu, Director of CTA, it is preferable to build resilience among livestock keepers than to provide humanitarian assistance when droughts occur. “By building resilience now we can avoid suffering and the logistical complexity of aid provision later.”
He further said that the conference showcased the workings of the index-based livestock insurance and laid the groundwork for further deliberations and action on how program could be scaled up to benefit the region’s livestock keepers. FAO sub-regional coordinator for Eastern Africa and representative to the AU and UNECA, Dr. David Phiri has made opening remarks on the workshop.
Expressing his gratitude to ILRI and WB, for jointly convening the Ministerial Policy Dialogue on index-based livestock insurance, and the Ministry for giving adequate attention to this issue, he said that reiterate that the livestock sector contributes between 3 percent (Djibouti) and 54 percent (Somalia) to the GDP of IGAD countries, but that livestock owners and especially pastoralists are greatly influenced by climate change, with extreme weather conditions posing a potentially fatal threat to livestock and negatively impacting their productivity and food security for years.
Without doubt, as to him, drought is among the most serious problems in this region, and it is estimated that the annual costs of drought related production losses and related mitigation costs are estimated at almost 2 percent of the GDP of countries in the IGAD region. These costs have particularly pernicious impacts on small livestock producers, the poor and vulnerable.
Impacts of drought on livestock threaten to cause setbacks to the overall economy if adequate protection and response measures are not taken. It is essential that IGAD countries develop a common approach as this is beneficial in many ways including economies of scale, benefit spill-over from the countries that have developed adequate systems and materials that can be scaled up and rolled out.
Extending his remarks, he said, “In order to avoid these negative impacts on the region’s economies, we require not only early action in case of imminent droughts, but also preventive measures.”
Index based-livestock insurance is an important financial instrument that could be useful to mitigate the risk livestock owners’ face. FAO has assisted governments with testing this concept in Kenya and Ethiopia, and evidence has been obtained that it has positive impact to the welfare of the pastoral household, he stated.
In conclusion, he said that countries are advised to integrate this tool into their strategies, and for those who have successfully piloted it, to roll out implementation so that significant percentages of the population can profit from it.
The Ethiopian Herald May 24/2019
BY BACHA ZEWDIE
