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Towards a robust national livestock market information system: Stakeholders convene to chart way forward

Sustainable livestock systems

Stakeholders workshop on livestock market information systems Participants at the stakeholders’ workshop on livestock market information system held on 11 July 2017 in Naivasha, Kenya (photo credit: ILRI/Dorine Odongo)

Access to accurate and timely market information among pastoralist livestock producers and market actors is a perennial concern, even more so following the immense emphasis and efforts placed on improving livestock production in drylands. Livestock production being the major (and in most cases the only) source of livelihoods for communities in the drylands of Kenya, the need to address the full continuum of livestock production from breeding all the way to market access cannot be overemphasized.

Consequently, many attempts are being made by different stakeholders —both governmental and non-governmental actors— to collect real time market information. For example, the livestock component of the USAID Feed the Future Kenya Accelerated Value Chain Development project (AVCD) which seeks to increase income from sales of livestock focuses on enhancing…

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Index-based insurance: Insurance or lottery tickets?

Environmental shocks are drivers of poverty as well as a fact of life in many rural areas of the developing world. In the developed world, agricultural insurance provides protection from such calamities. But conventional insurance products have not reached many rural households in developing countries due to the high costs of gathering information relative to the size of policies demanded and well-known moral hazard and adverse selection issues that complicate product design and pricing.

Recently, there has been much excitement around the use of index-based insurance as an alternative to conventional insurance products that may extend the rural poor’s access to formal insurance coverage in developing countries (Alderman & Haque 2007; Barnett, Barrett & Skees 2008; Mahul & Stutley 2010). Index insurance provides indemnity payments based on a signal that is related to covariate losses rather than actual and observed individual losses. When signals are chosen properly—easy to observe, exogenous, highly correlated with the insured risk—suppliers of index insurance face much fewer costs associated with adverse section, moral hazard monitoring, and validation of claims than they would if they were offering conventional policies.

Read the full blog post by Nathan Jensen, a Postdoctoral Associate at Cornell’s Dyson School working with the Index  Based Livestock Insurance (IBLI) project at the International Livestock Research Institute (ILRI).

IBLI partners discuss how project partnerships are shaping livestock insurance policy in Kenya

IBLI academic and policy workshop

Participants in a workshop on developing policy innovations for the pastoralist rangelands through cross-sector partnerships at ILRI Nairobi, Kenya 9 June 2015 (photo credit: ILRI/Paul Karaimu).

Development programs such as Index-Based Livestock Insurance (IBLI), which provides innovative insurance solutions to help livestock keepers cope with drought-related livestock losses in East Africa, can provide evidence-based research and lessons learned for wider policies to support livelihoods in pastoral production systems.

How cross-sector partnerships can be harnessed to foster policy innovation in the pastoral rangelands was a key question of a recent IBLI-hosted workshop.

Held on 9 June 2015 at the International Livestock Research Institute (ILRI) in Nairobi, the workshop, which was organized and hosted by IBLI in conjunction with collaborator Russell Toth of the University of Sydney, brought together 75 participants from more than seven countries. These included Senior Policymakers in the Kenyan Government, Researchers in Rangeland and Governance issues, and Private Sector Actors such as Insurance Agents, Donors and Development Practitioners with interests in pastoral development and index-based insurance.

Since 2010, IBLI, which is implemented in Northern Kenya and in Southern Ethiopia, has been designed, developed and implemented as a market mediated index-based insurance product that can help to protect livestock keepers from drought-related asset losses, particularly those in the drought prone Arid and Semi-Arid Lands (ASALs).

The workshop reviewed the policy value of the evidence gathered by the IBLI project since its inception. Polly Ericksen, leader of the Livestock Systems and Environment program at ILRI, said IBLI is an exemplary example of a research-for-development innovation that is being actively upscaled after successful adoption by end-users, and which has solid evidence of impact. Ericksen said the policy workshop provided an opportunity to review successes and challenges from the project and explore ideas for it’s future expansion.

Why IBLI and how?

Andrew Mude, the IBLI project leader explained the research that led to the design of the IBLI product and the evidence of positive social and economic change that resulted from its implementation. He said the project focused on index-based insurance because a risk management option for vulnerable households in the ASALs was needed, which would provide pastoralists with an intervention they could use to protect themselves against livestock losses. He said the IBLI product has helped reduce risks associated with keeping livestock in the ASALs and pastoralists are increasingly purchasing insurance for their animals. According to Mude, IBLI has the potential to improve fiscal efficiency of other humanitarian interventions in areas with ‘poverty traps’, which can, in turn, increase incentives of entry for other development agencies.

Evidence from IBLI’s research shows that households who have taken up insurance have not only improved their ability to cope with post-drought effects, but are also 25% less likely to reduce meals especially with regard to small children. Further, IBLI is more cost-effective when dealing with hunger and drought-related effects compared to other household safety net programs (HSNP) in Northern Kenya. Some of the successes of the program are attributed to:

  1. Using evidence-based research to design a precise contract suitable for the ASALs;
  2. Establishing informed and effective demand (Ensuring that clients are accurately informed and educated on the product);
  3. Developing delivery mechanisms tailored to reduce costs; and
  4. Considering policy and institutional requirements for making IBLI sustainable

What is the role of the private and public sectors?

The private sector is playing a key role in ensuring IBLI’s long-term sustainability. Speaking during the workshop, Hassan Bashir, CEO of Takaful Insurance of Africa (TIA), whose company sells IBLI in Northern Kenya, said increasing IBLI’s penetration requires making sure there is community acceptance and ownership of the product for its long-term sustainability.

Michael Carter, Director of the Index-Insurance Innovation Initiative and Professor of Agricultural Economics at the University of California, Davis, called on more government/public sector involvement to support the private sector in creating an integrated social protection system for the ASALs in Kenya. He said the public sector can be involved in certifying and regulating the quality of insurance contracts to make them more precise and better able to meet the needs of pastoralists.

Improving livelihoods, influencing policies

Vincent Githinji from Kenya’s State Department of Livestock in the Ministry of Agriculture, Livestock and Fisheries, said that the Government of Kenya (GoK) is looking to adopt policies that will harness the role of the private sector and use evidence-based research to address the challenges faced by livestock keepers in Northern Kenya. A quarter of Kenya’s population is food insecure and most people in the ASALs depend on food relief, as livestock provides 80% of their livelihoods and income, and drives the economies of these regions.

Noting that the IBLI program has been highly successful in addressing the tremendous challenges posed by drought, Githinji described the GoK’s commitment to building on the lessons of IBLI for the soon to be launched Kenya Livestock Insurance Program (KLIP) which will scale-up the provision of livestock insurance to pastoralists in Northern Kenya.

KLIP, which will bring together public policy, research and private sector innovations, will include a macro-level insurance scheme for asset protection, with support from the World Bank and ILRI. Its objective is to cushion pastoralists from drought-related losses and build their resilience for sustainable food security. It also aims to increase public-private sector partnerships in the context of increasing the availability and adoption of index-based insurance. The program hopes to reach over 5000 households in Wajir and Turkana counties and will borrow heavily from the IBLI model.

‘We need to allow the private sector to thrive where it is already established,’ said Githinji, who added that KLIP will introduce insurance to areas not covered by IBLI and will work with the program in establishing a sustainable livestock insurance industry for the ASALs before eventually scaling down the GoK’s role.

Watch a 5-minute video of participants’ comments from the meeting

Read a previous blogpost highlight a pay-out with Takaful Insurance of Africa under IBLI

Download the workshop presentations below:

Sustainable livestock insurance for pastoralists: From research to practice and impact

Developing Policy Innovations for the Pastoralist Rangelands through Cross-Sector Partnerships

The “Elephant in the Room” Issues in pastoralism research: An informal conversation

Animal Fattening and Fodders

Determinants of migration and environmental spillovers of IBLI

Kenya Livestock Insurance Prgram: Convergence of Public Policy, Research and Private Sector Innovations

The Design and Implementation of Index Insurance Initiatives: Three challenges for policy

Crowdsourcing rangeland vegetation conditions

Improving organizational efficiency through Information & Communication Technology

Academic workshop: Mobile Pastoralism, Index Insurance, Computational Sustainability and Policy Innovations for the Arid and Semi-arid Lands of East Africa

This workshop was held on June 10 and 11 2015 , at the John Vercoe (JVC) Auditorium International Livestock Research Institute (ILRI) Nairobi, Kenya

The Academic Workshop provided a forum to showcase the research work that is ongoing in and around IBLI on behavior and welfare and drivers of change that affect the pastoral community in the Arid and the Semi Arid Lands. The two day event featured talks from renowned scholars and academicians from across the world on issues that concern the pastoral community. There will be discussions on micro-insurance as a social protection tool, whether IBLI has impact on increasing resilience, market engagements or if it is competing against expectations.

See workshop agenda here

Access more details about the workshop here

Review the presentations given here

Policy Workshop: Developing Policy Innovations for the Pastoralist Rangelands through Cross-Sector Partnerships

The Index-Based Livestock Insurance (IBLI) program represents a fruitful cross-sector partnership, bringing together academic researchers, policymakers, private sector partners, NGOs and other stakeholders to develop an innovation to improve livelihoods on the pastoralist rangelands of East Africa. How will this innovative partnership continue to evolve as IBLI looks to scale, and what possibilities are there to develop similar synergies in other policy domains?

We are organizing a workshop on Tuesday, June 9, 2015 in Nairobi, Kenya, to bring together stakeholders interested in emerging innovations to improve socio-economic outcomes on the pastoralist rangelands of Kenya and beyond. We seek to engage policymakers, government officials, private sector actors, donors, and academics. The workshop will be highly interactive, combining plenary presentations, panel discussions, question-and-answer periods, and opportunities for more informal interaction amongst attendees.

The morning session of the workshop will focus on assessing and drawing out insights from the cross-sector partnership behind the IBLI program, and the emerging livestock microinsurance agenda in Kenya. The session will include a keynote presentations on the IBLI agenda, and the development and scale-up of (livestock) microinsurance more broadly. It will include inputs from private sector and government actors highlighting the role of research in helping to develop IBLI and the Kenya Livestock Insurance Program (KLIP). The session will close with a panel Q&A to address emerging questions from the presentations.

The afternoon session will  focus on a number of emerging innovations, some of which have grown out of the IBLI program. The first segment highlights new ways in which technology such as mobile phones, GPS tracking collars and remote sensing data are being used to develop a deeper understanding of the pastoralist livelihood and policy innovations on the rangelands. The second segment focuses on emerging interest in feed and fodders and research and policy directions in this area. Each segment will close with a Q&A session to further identify and discus pressing questions on each of these topics.

We hope that you will be able to participate and we look forward to welcoming your contributions to the discussion and the ongoing policy and research agenda.

See the workshop agenda here

Access more details about the workshop here

Review the presentations given here

IBLI receives high level visitations from its collaborators in the USA, Europe and Australia

The Index Based Livestock Insurance (IBLI) team had a very exciting week from the 1 to 5 July 2014 with two talks by Prof. Chris Barret and presentations by Russell Toth and Anton Vrieling. Russel Toth, an Assistant Professor in the School of Economics at the University of Sydney, Australia, gave a presentation on ‘Productive Spillovers of the Take-up of Index-Based Livestock Insurance’ whereas Anton Vrieling,  and assistant Professor at the Natural Resources department of ITC (now part of UT) in the Netherlands, gave a presentation on ‘Historical extension of operational NDVI products for livestock insurance in Kenya’.

Prof. Chris Barret  gave a talk on the Impact of IBLI to date from findings that are emerging, starting from the pilot that had taken place in Marsabit in 2010 to date. See the presentation below:

This was followed by an institute level talk on ‘Towards a Theory of Resilience for International Development Applications with some reflections on Practical Implications’ emphasizing the potential role that IBLI can play as part of the resilience discourse.

Mifugo Maisha Payouts in Marsabit and Isiolo

In March 2014, policyholders in 4 out of 6 divisions of Isiolo received payouts of approximately Kenya shillings 404,240. The bulk of the payout went to 10% trigger contract policyholders in Oldonyiro division. In Marsabit, policyholders received payouts amounting to Kenya shillings 65,940 in North Horr and Loiyangalani. The majority of payouts went to those pastoralists holding 10% trigger contracts in North Horr, as the level of predicted livestock mortality due to drought and severe forage scarcity was not very high.