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East African herders insure against drought: An impact narrative from Kenya and Ethiopia

Private insurance against drought, common elsewhere in the world, has been successfully piloted in northern Kenya since 2010, as well as in parts of southern Ethiopia.

Under the index-based livestock insurance (IBLI) project, insured pastoralists receive a pay-out based on predicted livestock mortality, which is estimated according to the amount of forage available over a season (as indicated by satellite imagery). Whenever there are pay outs, pastoralists are protected against ‘distress’ sales of livestock to generate emergency cash, and other consequences of drought. In northern Kenya, an adapted version of the system is providing sharia law-compliant livestock insurance to Muslim pastoralists.

The challenges of working in the arid and semi-arid lands (ASALs) mean that the voluntary, micro product will initially require public support to develop into a sustainable market, but its social and welfare benefits suggest that some form of long-term public support may be justifiable.

Therefore, ILRI is also working with the Government of Kenya and the World Bank to scale the provision of a macro IBLI product throughout northern Kenya within a public–private framework.

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